Memory loss affects some Generations more than others. What key things do investors often forget?

You know, I know where this question wants us to go. But I’m just not sure that it’s right.

The obvious answer? “They forget about the unbreakable relationship between risk and reward. And they forget about pain.”

But is it forgetting, if you’ve never experienced it before? Every time a stock market really, really soils its nappy, these two things have inevitably been ignored.

Proper crashes – where countless millions of shirts and pants are lost – only happen about once a generation. Every couple of decades, collective amnesia, supported by a fair dollop of greed, leads to a financial implosion.

You will remember the crunch that financially impacted you most. And that’s going to be when you’re at your financial peak, in your 50s and 60s.

In 1973-74, markets collapsed, hitting a generation that’s largely no longer with us.

The October 1987 fiasco belted the savings of Aunt Kerrin’s mob of retirees to the right. (Now, if anyone’s in danger of developing dementia …)

And then, almost exactly 20 years later, Boomers watched their share-based investments fall by more than half and their superannuation belted by 20 per cent-plus during the wreck of 2007-2009.

Few Xers had much to lose this time around. And in any case, they’ve still got time to recover.

But sure as Gordon Gekko and 1987 were forgotten, Gen X’s turn at greed – it’s no worse than any other generation – will lead to another market crash in a decade or so. And it will look like we forgot risk and pain.

We won’t. It will be just our first time to experience it.

Bruce Brammall is the author of Debt Man Walking ( and principal adviser with Castellan Financial Consulting.

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