Given the wild gyrations in the market over the past few weeks, some investors may feel down on their luck. After all, if they had just invested a bit differently or timed their contributions a bit better, their portfolio wouldn’t be down so much this year.
The concept of luck, or “mazal” in Hebrew is not limited to the world of investing. The term is thrown around often in Judaism. At a simcha, well-wishers will say “mazal tov” as congratulations, literally meaning “good luck.” When a new endeavor is pursued, people will say “May it be with mazal.” If readers take a moment to think about the role that mazal has played in their own lives, they will undoubtedly find the luck in seemingly small or seemingly insignificant decisions or events that literally changed the trajectory of their life. I know this has been true for me on a number of occasions. Here are two:
Mazal & My Bashert: I had an instance of good mazal on Purim in 2010. I was single and living in Washington Heights. My friend, Wendy, invited me to her Purim party after megillah reading, which I eagerly attended. Unfortunately, when I got to the party, there were only three people there. Not exactly what I was expecting. I left and went to the Purim festivities at Mount Sinai, the shul nearby. After an hour or two, I contemplated going back to my apartment and turning in for the night. For whatever reason, I decided to go back to Wendy’s party. When I got there the party was hopping. There must have been 50 or 60 people schmoozing and feasting on delicious food. A few moments after I arrived, I spotted a girl on the other side of the room. I got Wendy’s attention and pointed at the girl, indicating that I wanted to be set up with her. Wendy made the shidduch… and the rest is history.
I can’t explain why I decided to go back to that party. It was a total dud when I went the first time, and I was already tired and ready to go to sleep. Due to a stroke of mazal, I went back to the party, and it literally changed the trajectory of my life.
Mazal & My Career: When I was a senior at Yeshiva University, I was laser focused on securing a job after graduation. My challenge was securing interviews. It seemed strange that I was struggling so much. After all, I spent three summers working in finance and I had a good GPA.
Ultimately, I decided that getting an interview was a numbers game. If I reached out to enough people working in finance, I would ultimately find someone that was looking to hire. Finally, after four months and a thousand e-mails (literally), I received a response from a stranger working at Merrill Lynch in the Fort Lee, N.J. office. His response was “Jon, we are always looking for young and hungry talent. Get in touch with me when you graduate and we will have you in for an interview.” I was ecstatic. After months of being ignored, I finally found someone who was willing to interview me. A few weeks later I had my first round of interviews, followed by some assessment exams to determine if I would be a good fit for that role. Finally, I had a final round interview and received a job offer. A few months later, I started my career on Wall Street.
I can’t explain why I e-mailed this gentleman at Merrill Lynch. What’s even more puzzling is why he decided to respond to me. Most other people didn’t, and he didn’t know me from a hole in the wall. Another area of mazal was all the interviews that I did not get. Had I landed a job in a different area of finance, my career would have been much different. I likely never would have been a contributor for The Jewish Press!
Mazal & Investing: The role of luck is not typically emphasized when it comes to investing. Needless to say, it sounds much better to emphasize pedigree, skill, and experience. However, mazal plays a crucial role. For instance, investing during a bad or stagnant market can have a devastating financial impact, even for a skilled investor. On the other hand, investing during a Bull market can make investor novices seem like geniuses. A good example of the former are the folks who began investing during the Depression of the 1930s. During the Great Depression, the stock market experienced a dramatic decline, losing nearly 90% of its value. Specifically, the Dow Jones Industrial Average dropped from its peak in September 1929 to its lowest point in July 1932, a drop of 89%. It’s pretty tough to recover from such a devastating drop in stocks. The luck of when you were born dictated how poorly your portfolio performed during those years.
While the Depression was an extreme example, you don’t need to go that far back. Gen Xers are a more current example of how bad mazal can impact your investments. Many in that demographic entered the workforce and began investing under challenging circumstances. The technology bubble burst in 2000, causing the tech heavy NASDAQ to plummet by 80% in value. It took approximately 15 years for that index to recover its losses. The S&P 500 also remained stagnant in the decade from 2000 to 2009. It experienced both the tech implosion and the Great Financial Crisis that caused a 57% drop within 18 months.
Mazal with investing can also work in one’s favor. The Baby Boomer generation started their investing career with some of the best investing luck in history. This period was marked by strong economic growth, technological advancements, a booming stock market, and dropping inflation. All of which contributed to significant returns for investors. Boomers who started their career in 1982 experienced 15 years of staggering growth in both the stock and bond market. The annualized performance of the S&P 500 from 1982 to 1997 was approximately 17%. The annualized return for U.S. bonds from 1982 to 1997 was approximately 11.5%. That’s a pretty good way to start your investing journey.
Creating your own mazal: When I think about the impact of mazal in life, I am struck by a quote attributed to Thomas Jefferson: “I find that the harder I work, the more luck I seem to have.” This thought rings true to me.
When finding my bashert, an odd set of circumstances led me back to a boring party where I spotted my Lauren, my eishes chayil. However, I needed to make the effort to go back to the party instead of going to sleep. I also needed to take the initiative and ask Shadchan Wendy to set us up.
In my job search, it is certainly unusual for a stranger to be willing and eager to interview a college senior he didn’t know. Yet, I did put in the effort, sent out a thousand e-mails to eventually get a positive response.
In the world of investing, there is no doubt that some demographics have a better lot than others based on something as arbitrary as when they were born. Nevertheless, even a bad market is not enough to hold back folks who consistently practice prudent investing habits. During the Depression, things were bad for some time. However, the market ultimately rose steadily in the subsequent years. Investors who stuck with a prudent strategy over the long-term would likely have retired with a larger nest egg than if they had not invested at all. The same is true with Gen Xers. Despite multiple market implosions, from 2009 through 2020 the market experienced one of the greatest Bull markets in history. In order for investors to improve their luck, all they needed to do was stick with their strategy, add money regularly, and invest for the long-term.
The converse is also true for investing. Even though Boomers were gifted with a wonderful set of investing circumstances, they still had to do their part by saving regularly and investing prudently. There are many Boomers who are looking to retire today who did not take advantage of their circumstances and may blame their fortune on bad luck.
There are an infinite number of outside forces that can impact the trajectory of our life. Many of these forces are out of our control. However, for folks who put in the effort and make good decisions, luck has a way of being on your side.
Wishing all Jewish Press readers much MAZAL in their investing and personal lives!
