My first job out of college (2005) was in banking. I started as a drive through teller making $11.54/hour.
Based on that experience these three memories will forever be etched in my mind:
SITUATION 1 – [2005]
The ag lender was a pillar in the community, and I vividly remember his unsolicited investment advice; That I invest 100% of my 401k in the bank stock and fully take advantage of the employee stock purchase plan.
He was in his late 60’s and proudly shared that he had amassed several million dollars for retirement, all in his bank stock.
“Bank stocks are safe bets because they never go down.”
SITUATION 2 – [2007]
A few years into my career, I took a position with a different bank. During new employee orientation, a lovely lady from HR in her early 70’s shared with me that she had 98% of her retirement in the local bank stock and the remaining 2% in the S&P 500®.
Why the 2% in the S&P 500®? She explained it allowed her to take advantage of owning fractional shares of other banks.
Again, I heard from her this time: “Bank stocks are smart investment because they never go down.”
SITUATION 3 [2007]
I was meeting with a woman in her mid-60s, she was an employee of GE and believed in the company so much so that her IRA was 100% invested in GE stock and had an account balance that ballooned to a whopping $700,000 over the years. At the time of our meeting, $GE was trading at $180 share.
The sentiment was: “GE is as blue chip as blue chip gets, it will never go down.”
LESSON [2009]
In 2009, the stock market hit 📉 bottom after the housing crisis ripped through the economy. The S&P 500® lost more than half its value from its 2007 peak, and countless 401(k)s and investment portfolios were destroyed. Banks collapsed, businesses closed, jobs vanished, and confidence also reached a new low.
The ag lender from Situation 1 and the HR employee from Situation 2 lost everything. Their bank stocks were worthless. Their retirement dreams evaporated, and they continued to work through their old age until they died.
The GE employee from Situation 3 reached a point that she wanted nothing more than to simply live debt free and to pay off her mortgage. Her IRA which was fully funded with GE stock (now trading at <$70 share) had been cut in half, worth $350k (roughly the same amount left on her outstanding mortgage balance).
She told me she didn’t care about the tax bill that would follow in April. She didn’t care about diversification. She definitely didn’t care about historical bear market recovery periods. She only cared about one thing… getting out of GE and paying off the mortgage.
In the wreckage of the ’09 recession, the groundwork was quietly laid for one of the longest bull markets in history, one that we’re still enjoying currently. GE currently trades at an all-time high of $307 (as of 10/31/2025).
CONCLUSION
Buying stocks (investing in companies) is the easy part. Having a disciplined approach to selling and/or staying invested is much more challenging.
Everyone loves a smooth ride. Few can handle real bumps.
I’m growing increasingly concerned about having similar conversations with people who are not willing to review their overweight allocations of current winners.
Many people have enjoyed the meteoric ride that’s provided by the Magnificent Seven 📈.
My best advice, however, stay diversified, stick to your plan. Never fall in love with an individual stock. It will never you back. If you think it can “never” happen, you are probably short sided.
“Everyone has a plan until they get punched in the face.” –Mike Tyson
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