A question I have been getting a lot lately is whether it is a good time to still invest in the market.
With Inflation, wars and other assorted craziness going on in this world, the current volatility in the markets has a lot of people questioning what to do.
My answer to those who want to know if it’s a good time to invest is similar to a popular Chinese proverb that says: “The best time to plant a tree was 20 years ago. The second-best time is now.”
If we are invested for the long term, there is no time like the present to invest. If you bought an S&P 500 index fund and held on to it, as long as you bought it before July 2021 you are up.
Yes, there is a lot of stuff to digest in the news these days. To that, I say; Stillness is the key to investment success.
Warren Buffett in 2008 wrote in the New York Times Op Ed section
“Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.
Since It has since tripled to ~34,000+
History shows us that over longer periods of time, the markets tend to go up. There is no guarantee this will remain true in the future, but we have never had a 20-year period where the S&P 500 was negative, and it has only been negative over a 5-year period 13% of the time. In 76 of 87 5 year rolling periods, the S&P 500 has been up.
This does not guarantee our future returns, but it tells us that if we have an appropriately long time horizon, we should be ok.
This is why I recommend that you should have an investing theory that is heavily researched and build a set of rules around that theory. If you have not properly studied why you are investing, you are prone to change it at the first signs of trouble. You cannot get to your destination by constantly changing course.
If you don’t want to put in the time and effort, you can easily hire someone to do it for you. That way, when you inevitably have questions or doubts, you have someone to talk it through,
To answer the original question. Yes, it’s still a good time to invest, you should just know why. And for what purpose you are investing
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