Signs of recovery

I know almost nothing about investing. Probably not a good thing for a Chicago MBA to say, but there it is. I have a pretty boring and straightforward philosophy - buy and hold a diversified portfolio. The trick to this, that I learned from my dad, who unlike me was indeed a great investor, is to ignore your portfolio as much as you can.

I have heeded that advice diligently for the last couple of years. I figured that if I looked closely at my 401k, at best I'd feel depressed and at worst I'd overreact and pull my money out, buying high and selling low.

Today I got my reminder that my monthly statement for my BCG 401k is now available online. I clicked through out of curiosity. This graph is my portfolio in this particular 401k. Note that this says NOTHING about my ability to invest since this is pretty much just an index. However, it says a lot about the current economic recovery. I was pretty floored by the steep decline, but corresponding incline.

I should be clear - part of the reason it has a healthy incline is that I invested capital at the beginning of the last two years (those are the only two points where cash was invested in this graph). At any rate, with a bit of my own stimulus, the fund is back on its longer term trajectory. And I didn't have to saddle my children and grandchildren with debt to make that stimulus work.