What do you do when prices go down?

Everybody loves reduced prices. We look for market trends, study historical data, statistics before buying anything – be it stocks, house, car or any other commodity. With markets being flexible, prices for most things swing up and down periodically.

When prices are lower than what you have hoped for then all is well. You decide to buy the product and you are happy. But what happens when things turn the other way. Say for example you purchased a TV and after 2 weeks the prices for the same TV came down by about $300. What do you do? You feel awful. You feel cheated. You try your best to return your product and try to get hold of the same product for a better price. Sometimes it is easy and you succeed but sometimes it is too late.

What would you do if after you bought the product for a cheaper price – the price increases? Do you go back to the dealer and pay him the difference so the dealer can make profit? My guess is “No”. Then why do you worry when prices comes down.

In late 2008, real estate prices in the US came down drastically. I know a lot of friends who had spent enormous amounts of money to buy house before that and now feel bad about it. Same thing happens with stock markets too. When Facebook went public, a lot of my friends woke up early in the morning to buy the shares in the best price. Little did they know that the prices would go down subsequently and did not climb back up yet.

What do you do when things like this happen? If I am faced with a similar situation, I would feel bad for sure but I wouldn’t dwell on it for long. I wouldn’t spend time thinking about why it happened to me or why I did not wait for few more days or how my calculation went wrong. I would instead forget about the lost money and start preparing for the future. Start thinking of ways to prevent it from happening in the future and to make up for the lost money.

A friend of mine once told me that problems related to money is not a problem at all. Losing money is not that big of a problem as compared to loosing someone dear to you. Losing a few dollars here and there is not a big deal. What is important is peace of mind, your time with your loved ones and happiness. And of course good health. If you have all of them then you are the richest person around.