Wednesday, March 13, 2013

Minimizing Losses Mentality

During the Great Recession, I developed a mentality of minimizing losses with our savings.   It was better to be conservative and preserve capital than to take risk and incur losses.  Despite recovering most of our losses from the 08/09 decline, I continue to be focused on minimizing losses, especially with funds for our short term expense needs. 

For now, I am less confident about the economy than in 2007, the last time our savings were this high.    So we continue to hunker down, keep a high proportion of liquid assets, and continue to live frugally.  Although we may miss out on some gains if the market continues to advance, I will sleep better at night than if we had more invested in equities.

For more on The Practice of Personal Finance, check back every  Wednesday for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

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