Have You Thought of Turning the Doom Off? How Doomerism Is Quietly Wrecking Your Retirement

Have you thought of turning the doom off? 

That’s the question the awesome song Nothing Went Foom by Bright Mirror keeps asking. 

And it’s the right question — because doomerism has a track record, and the track record is that nothing went foom. 

Not the nuclear winter. Not the population bomb. Not Y2K. Not the AI apocalypse that is supposed to arrive any week now.

Doom, doom, it’s always coming soon. 

But the sun keeps coming up on the same old room.

Here’s the part nobody connects: That same doomer instinct is quietly wrecking your retirement. 

Not with a crash. 

With something slower and exponentially more expensive — bonds, cash, and a balanced portfolio held for an entire lifetime. 

The only thing exponential is the cost of slowing down.

WHAT YOU WILL LEARN:

• Why do people doomerize when nothing went foom?
• What is the exponential cost of doomerism?
• How does doomerism quietly wreck your retirement?
• Does doomerism mean you have to save twice as much every year?
• Why do smart people doomerize?
• Does research support them?
• Why shouldn’t you change your investments when you expect a decline?
• What should you do – instead of doomerizing?

THE PATTERN

Doomerism always sells the same product: safety. And it always costs the same thing: the future.

Nuclear power is the cleanest example. In the nineteen seventies, the world looked at Three Mile Island and Chernobyl and said — never again. We didn’t build the plants. We didn’t build the grid. And fifty years later, we’re still paying for it. The only thing exponential is the cost of slowing down.

Now the same movie is playing with AI. You’ve modeled every way we die. Now model what goes right. Your Probability of doom is a mood ring you read by candlelight. Meanwhile, we’re folding proteins, curing diseases, and the future looks exponentially bright. The benefits of AI can life changing for us. We could cure many or all diseases. The only thing exponential is the cost of slowing down.

But here’s what I want you to see: the same fear that froze nuclear is freezing your portfolio. And the cost is just as exponential.

THE MATH OF YOUR FUTURE

Let’s do the numbers, because this is where it stops being philosophy.

Equities, long-term, make about 8%-10%/year, say 8%/year — conservatively. Bonds make 2%-4%/year — say 3%/year. Inflation runs about three. So bonds, after inflation, make nothing. Zero. You’re treading water for thirty years and calling it safety.

Bonds had a 40-year period with zero return after inflation from 1940-1980. Meanwhile, equity declines have always been temporary. Stock market returns after inflation have been more consistent than bonds, based on the study by Prof. Jeremy Siegel.

Long term after inflation, equities are safer than bonds. And the long-term growth of equities is exponentially higher.

Equities at 8%/year double roughly every 9 years. Bonds at 3%/year take over 23 years. Same money, same time, and one of them becomes 4 times the other.

Run it out: $100,000 at 8% for 30 years becomes about $1 million. At 3%, it becomes about $240,000. That is 6.4 times the growth. That’s not a rounding error. That’s the difference between retiring comfortably and retiring broke.

And here’s the kicker from my own research: with a balanced portfolio, you have to save nearly twice as much of your income to hit the same retirement as an all-equity portfolio. 20% of your income in equities gets you there. 40% of your income in a balanced fund gets you the same place — if you’re lucky. Saving 40% of your income is crazy! You are not going to get there.

Let me repeat: Save 20% of your income to invest in equities or save a crazy 40% of your income to invest in a supposedly safer balanced portfolio. Both get you to the same retirement. Learn to tolerate temporary declines and you can retire comfortably on half the savings.

Doomerism means you have to save twice as much every year!

After you retire, my study of the “4% Rule” over 150 years found that a 100% equity portfolio funded a reliable retirement 96% of the time without managing it. 100% of the time if you effectively manage your retirement income.

What about 100% bonds? Only 47% success rate. Less than a coin flip. And there was not a single case in 150 years where someone ran out of money with all equities but would have been fine with bonds.

THE EXPONENTIAL LOSS

Now here’s the part that should keep you up at night. The loss from doomerism isn’t linear. It’s exponential.

If you hold bonds instead of equities, you’re giving up roughly 5%/ year. Which means you are giving up getting 6.4 times the growth after 30 years. You have to save twice as much every year to get the same retirement.

You count the cost of getting it wrong. Who counts the cost of taking too long? That’s the question.

Doomers are excellent at counting the cost of the crash that is temporary. They’re terrible at counting the cost of the decades of growth you spent hiding from it – and the great life you could have had. The only thing exponential is the cost of slowing down.

WHY IT HAPPENS

So why do smart people do this? Because doomerism feels like prudence. Selling stocks after a crash feels like protecting yourself. Holding cash feels like being careful. And the industry profits from it — balanced funds, target-date funds, the whole glide-path machine is built on the assumption that you should get more conservative as you age.

But the research says the opposite. The optimal lifetime allocation in one major study focusing on the US was 33% domestic stocks, 67% international, and 0% bonds, 0% cash. In short, 100% equities is optimal. Not because stocks are safe — because over a 30-year horizon, they’re safer than the alternative. The risk of stocks is a bad decade. The risk of bonds is a bad lifetime.

And sequence of returns risk — the scary thing advisors warn about with a big loss shortly after you retire — my research found it basically isn’t a thing for a 30-year retirement if you stay invested.

Retiring at an all-time high? All-time highs happen all the time. The market doesn’t care about your entry point over thirty years.

INVESTMENT PHILOSOPHY

As financial planners, we have an investment philosophy based on asset allocation to achieve your life goals. What we don’t have is a market outlook. We’re focused on your life goals, not on what the market is going to do next quarter.

Everybody’s worried about market declines. But declines in history have all been temporary. So it makes no sense to change your long-term asset allocation — and your long-term life goals — based on a temporary decline that you know will end.

The only market timing that works is to buy more at the bottom. Buy more after a 20% or greater decline. But never, ever sell.

THE COST OF WAITING

And here’s the AI point I keep coming back to. There are all kinds of improvements expected from AI — including, for example, that we may solve cancer in the next few years. And here everybody is focused on an unlikely catastrophe. They’re not focused on the exponential cost of what happens if we don’t solve cancer in the next while.

That’s the asymmetry nobody prices. The downside of doomerism isn’t just the money you lose hiding in bonds. It’s the breakthrough you never got because you spent 50 years afraid of the machine instead of building your future.

Here’s the thing about doomerism: it’s never been right about the future, and it’s been exponentially expensive about the loss of growth.

Nothing went foom. Not the nukes, not the robots, not the market. The sky’s still up. The world’s still spinning round. And the only thing exponential is the cost of slowing down.

You’ve modeled every way we die. Now model what goes right. Put the number down and give the future room.

WHAT TO DO

Create your long-term plan — your life goals, your timeline, your allocation. Make that allocation as close as you can to 100% equities, because that’s what the math says you need to grow your wealth long-term.

Then stick to it. Don’t doomerize. Don’t sell when the headlines scream. Don’t hide in bonds and cash because a crash feels close. Every decline in history has been temporary — and the only market timing that works is buying more after a 20% drop – never selling.

Turn the doom off. Avoid the exponential cost of waiting. Grow your portfolio. And live a great life.

We haven’t had our best days yet.

Ed