Risk Aversion

So in investing, it’s recommended that as a young person, you should take more risks, because you can afford it; direct your portfolio in an aggressive manner. I have done this, and I have been getting burned on the whole. I will also go ahead and say that my investing strategy probably isn’t the greatest, and I have definitely been burned on some speculative purchases (A Chinese solar panel company, a pharmaceutical start up whose key product did not get FDA approved), so maybe my version of aggressive investing is a little different than what it should be. *Well, I have actually done well, but I think it was just luck, investing in the nadir of the stock market. Most stock purchases since then have been fairly stagnant, or growth getting offset by those above terrible purchases.

This post however, isn’t so much about money. It’s about the zeitgeist. I believe I am becoming, or have become risk averse. My investment portfolio may be a symptom, but it may be the impetus as well. I guess, the overall question is: Is this generation (people entering the workforce and into adulthood, I’d say currently 20-30ish) bound the socioeconomic woes brought on by the economic collapse?

Obviously, people graduating and looking for jobs right now are having a hard time, but things seem extra hopeless at times. Not having lived through any real kind of depression/recession/stagflation before, I cannot speak from experience, but it seems like this recession is a reckoning- some kind of global rebalancing or redistribution. This time it seems like the mother-bubble. All the wealth and prosperity that was built on and by the global middle class was built on something artificial. What that is, I’m not sure. What I do know, is that it does not seem like there is a way out of this here in the US, and even less likely in Europe and Japan.

This risk aversion, for me, is a fear of making decisions, because of low expectations that 1) either choice will work out in the long run and

2) neither choice is really all that good anyways.

It could just be plain ol’ growing up, but I’m deathly afraid sometimes of making decisions because there is so much that rests on them. Being in debt from college I think is one of the larger factors in hampering decision making. I can’t just up-and-move, hoping to get a job somewhere, while carrying $300+ a month in loan repayment. With job prospects low, and growing up in a culture that says do what you love, rather than do what pays well (and not quite knowing what you love on top of that), it’s not easy figuring out what to do. I realize that not all decisions and jobs are permanent, but it is daunting right now, trying to get oriented. I want/need to be saving money (in general and for the distant future), but I want to travel. I want stability, but also chaos. I want life experience, but also want to build a solid foundation. Not all of these desires are mutually exclusive, and I realize that some things will just have to wait, but it is difficult weighting prudence and “having a story to tell.”

Ugh.

Thoughts?

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