The Dow dropped 400 points today. The S&P is down 3% so far this quarter. And we’re probably headed into some extended turbulence.
So should you wait to invest? (Or even take money off the table?)
ABSOLUTELY NOT!
Why?
3 Reasons
1. THE ONLY CERTAINTY IS UNCERTAINTY
The smartest people in the room have been calling for a recession for over 3 years.
Meanwhile, the market’s up 18%, not to mention recovering over 35% since the 2022 lows.
The first step in making money investing is to admit we have no idea what will happen next. Except…
2. MR. MARKET WAS BORN TO RUN!
Over a long enough time horizon (i.e. 15+ years), the market has historically only gone one direction – up and to the right.
Sure Mr. Market needs to take breaks every now and then, but he often keeps running long after after the spectators are sure he needed a break.
For that matter, even HE’S not sure when he’ll need a recharge.
3. THE ONLY WAY TO GET HURT IS TO JUMP OUT OF THE ROLLERCOASTER
From 2000 to 2020, the average investor made 2.9% annually.
Meanwhile, the S&P 500 made 7.9% annually.
Why? Because the average investor routinely plays by their emotions (i.e. their crystal ball) and does the perfectly wrong things.
They buy and sell based on which way the wind’s blowing, which is an excellent way to kill your returns.
But in their defense, it’s only because in a heightened emotional state, they forget #1 and #2.
And that’s why systematically investing – i.e. without a crystal ball or emotions – is the only way to consistently make money investing.
So are we headed for some stormy weather? Yeah, probably.
And what will we do about it? Absolutely nothing.
#alwaysbeinvested
