Look Before You Leap: The Story Of The Goat, The Fox, & The S&P 500

Look Before You Leap: The Story Of The Goat, The Fox, & The S&P 500
24 Jul 2017

It’s time for a bed-time story in the Everett household every night around 9pm.  If my 9 and 11 year old are too slow to pick out a book first, I will always grab “The Aesop for Children”, a book bought for my wife by her Grandma when she was 9 years old. Why? The stories seem to jump off the page and get my mind racing and saying “Ah HAH!”, “That’s great advice!”, “I knew it!” or “I’ll never fall for that again!”  I’m not sure how much my kids enjoy it, but I sure do.

Wikipedia says that Aesop was a Greek fabulist and storyteller who was believed to have lived between 620 and 564 BCE.  Aesop’s fables are many and the wisdom is endless.

This night, I happened to pick a story that is nice and short because I wanted to get the kids to bed.  As I was reading, I started to think about the average investor, particularly the ones who continue to diligently buy the S&P500 index through 401(k) contributions. I mentioned in an earlier blog that the average 401(K) lost -42% in 2008 (Metlife Retirement Income TV show) and that 401(k) investors had to make over +67%, just to get their money back (not counting their own contributions).  Here’s how the story goes:

The Fox & The Goat:

A fox fell into a well, and though it was not very deep, he found that he could not get out again.  After he had been in the well a long time, a thirsty goat came by. The goat thought that the fox had gone down to drink, and so he asked if the water was good.

“The finest in the whole country,” said the crafty fox, “jump in and try it. There is more than enough for both of us.”

The thirsty goat immediately jumped in and began to drink.  The fox just as quickly jumped on the goat’s back and leaped from the tip of the goat’s horns out of the well.  The foolish goat now saw the plight he had got into, and begged the fox to help him out. But the Fox was already on his way to the woods.

“If you had as much sense as you have beard old fellow,” he said as he ran, “you would have been more cautious about finding a way to get out again before you jumped in.”

Look Before You Leap:

With the S&P 500 index surging up over +260% since March of 2009, it might be a good idea to listen to Aesop’s crafty fox about being more cautious about finding a way to get out. Here at PII, we were shocked to find out that only 19% of worker’s have rebalanced their 401(k) (based on a USA Today article “No More Excuses: How to Rebalance Your 401(k).”  Rebalancing is selling and buying funds in your plan so that your asset allocation is on track with your original investment objectives, we like to call it making sure our customers don’t end up like the goat.

Good Luck! – Jonas


*Past performance does not guarantee future results. For informational purposes, not a recommendation. Investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate with changes in market conditions and when redeemed, may be worth more or less than their original cost.


Jonas Everett

Jonas C. Everett is originally from Cedar Rapids, Iowa, where he still resides with his wife, JoDee, and daughters, Ella and Addison. He graduated from the University of Northern Iowa in 1993 where he majored in Communications. He has 22 years of experience in the investment industry and estate planning business. He is currently a Partner of “Premier Investments of Iowa, Inc.” Jonas is also the founder and creator of “Lighted Tunnel Succession Systems,” which can be found on www.lightedtunnel.com. The last 10 years, he has been in charge of mergers and acquisitions for Premier Investments of Iowa, Inc. In 2011, Jonas founded the National Association of Retired Insurance Agents, to help retiring insurance agents implement their own business succession plans. His main focus is Estate Planning and Investments for Retirees and Pre-Retirees, and he also specializes in Retirement Income. He is a speaker for the Cedar Rapids School Buddies Program for 5th and 6th Graders. In his free time he enjoys golf, reading, and spending time with family and friends.