An Escalator and a Yo-Yo

The stock market is like someone playing with a yo-yo while riding up an escalator. The trick is to focus on the escalator, not the yo-yo.

I’ve never had much interest in the stock market, but in August 2019, I decided to join an investment group of about 20 women. We call ourselves MoneyBag$ and our goals are to learn about investing and bring long-term growth to our portfolio. About once a month, one or two of us picks a stock to present to the group. My first pick was in February 2020 and, because I’m into fitness and the stock was “on sale,” I chose Peloton Interactive. If you haven’t heard of Peloton, they make high-end stationary bikes and treadmills. Users pay monthly subscriptions to stream spinning and other classes.

The timing couldn’t have been better. A month later, the pandemic hit the US and, because people couldn’t go to the gym, the stock grew swiftly and significantly. But as people started going back to the gym in 2021, the stock started to tank and our portfolio took a huge hit. In 2021 Peloton’s stock price dropped so much, it took away almost all of our gains from the prior year.

I was telling Brian and Joann about this one morning before class and Brian shared with me the above escalator/yo-yo analogy. It was something he had heard from his financial advisor and it’s stuck with me ever since.

Fun fact: the stock market has its ups and downs. There will be changes in interest rates, elections, natural disasters, financial and personal crises, global pandemics, and as of this writing, invasions and war. But despite the volatility of the stock market (and whatever else is going on in the world), wise investors focus on the escalator, not the yo-yo. In the case of MoneyBag$, our focus continues to be to learn about investing and bring long-term growth to our portfolio.

Maybe your yoga practice, your weight, your business, your health, your wealth, or one of your relationships currently looks like a yo-yo. Maybe one of them has “tanked.” Whatever your ups and downs, I have no doubt that if you keep your eye on the escalator, you’ll continue to learn and bring long-term growth to your life.