Paying the Price

Don Southworth

I STARTED DOING the family grocery shopping when I was 12 years old. I also married a woman who doesn’t like to cook or grocery shop. That means I’ve been buying the groceries now for more than 50 years. Fortunately, I enjoy it most of the time, but only recently have I noticed some behavior that I wish I’d used more frequently in my early investing life.

I find it hard to buy anything unless it’s on sale. At times in my life, I spent the weekend clipping coupons. Today, I find them online. Being a huge fan of Costco helps, as does being a member of several grocery stores that are happy to send me the latest and greatest deals at least once a week. The truth is, when it comes to chili beans, pickles and potato chips, as well as just about everything else, I’m driven far more by the lowest cost and greatest discount than by brand loyalty or quality.

This sales mindset extends to other parts of my life. Over the years, I’ve learned most of the tricks for how to get good deals on everything from cars to clothes to credit cards. Some of my friends ask me for counsel before they book a trip or make a large purchase. Thanks to consumer advocate Clark Howard and others, I’ve learned a lot over the years.

Unfortunately, I haven’t always brought this same obsession to my financial life. In my younger days, I chased past performance and the hottest stocks or mutual funds. What’s 1% more in fees if I get back an additional 3% in annual return? Too often, I bought high and eventually sold low, or I worried when something went up too fast and sold it way before I should have. Mistakes at the grocery store cost a few dollars. Mistakes when investing can cost us five more years in the workforce.

I’ve been thinking lately that investing right now is like shopping in a store where nothing is on sale. By most measures, stocks are selling at close to all-time record highs. Even with the recent declines, most investments aren’t cheap enough for a bargain-basement shopper. I would never buy my food, clothes or trips at full cost. Yet sometimes I’ve bought my investments that way.

But not now. Fees and discounts matter—whether buying taco shells or technology stocks or Treasury bonds.

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