The Three Phases of an Investor’s Life

I meet investors everywhere I go. Last night, at CitiField, I talked to a bunch of them – people who know me from TV or from Twitter or whatever.

And in my conversations with them (after they ask to take a selfie, lol), I notice one consistent theme over and over again – they don’t understand what phase in the investor’s life they’re in.

There are three phases of an investor’s life:

Accumulation Maintenance Distribution

Let’s call it AMD.


When you’re in Accumulation, you’re a buyer of investable assets. You’re buying steadily, as in a 401(k) or making periodic purchases as excess savings build up. In this phase of your life, you should be rooting for markets to fall. You’re not using the money you’ve invested anyway, so I have no idea why a 35 year old should be cheering for new highs. But they are. And they say things like “the market seems a little iffy right now, I don’t know if I want to put any cash to work…”

I get that it’s a human instinct to want a placid environment where your investments immediately appreciate and make you feel and look smart – it’s just completely counter to what’s best for you. Nothing would be better for today’s accumulators than for a new secular bear market to commence, giving them another lost decade to pile up equity fund shares in advance of the next bull market. But they almost never think that way, from what I’ve seen and heard.


Maintenance is a little trickier. You’ve

Keep reading this article on The Reformed Brocker.

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