The Perfect Time To Invest & Why The Market Always Goes Up

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Like everyone, I sometimes struggle with waiting for the perfect time.

You wait for the perfect time to get married, learn a new skill, quit a bad habit etc.

And then after you just do the thing, you always wonder why you waited so long.

It’s no different with investing. If you’ve never invested before it’s hard getting started. It’s even harder if the market’s been steadily rising. Almost impossible when everyone is predicting a recession.

I remember when I first started investing in january 2018, my uncle told me to wait until the next recession before getting in.

I asked him: “When will that happen?”

In which he replied: ” This fall” (2018).

Well, my uncle got right, but it was pure luck.

The stock market fell aprox. 20 % from september 2018 to the start of january 2019.

Do you know when my largest lump sum investment was done?

August 2018. I invested aprox. $100.000 at once.

Do you think I felt like a fool at the end of 2018?

Hell yes.

But more importantly. How did I react to this?

I did nothing.

Do you know why?

Because the stock markets always go up in the long run.

Look at the S&P 500 chart below

In january 2018 S & P 500 was at aprox. 2,800.

Yesterday it was at 3,010. That’s a slight 7,5 % increase, which means that the index has gone nearly nowhere the last 2 years.

Yet I hear all the time: “You shouldn’t buy now, the S & P 500 is at an all-time high. There will definitely be a recession soon”.

But hey, do you know what?

I’m a long term investor. What happens tomorrow doesn’t matter. What happens next month and next year doesn’t matter.

I’m in this game for the long run.

The market is volatile.

Crashes, pull backs and corrections are all absolutely normal.

None are the end of the world. None are even the end of the market’s relentless rise.

There is a major market crash coming, and another after that. Over the decades you’ll be investing, countless smaller corrections and pull-backs as well.

Learning to live with this reality is critical to successful investing over the long-term.

And successful investing is by definition, long-term. Anything short-term is by definition savings or speculation.

The problem?

We don’t know when the recession is coming. Nobody does.

To play this market timing game well even once, you need to be right twice: First you got to call the high. Then you got to call the low.

Look at the chart below “Is This The Top?”

In 2012 ESRI said: “The US is in a recession”. The S & P was at 1200 at that time.

Just imagine if you were ECRI and sold all your stocks at this point. Sitting in 100 % cash until the recission is coming.

They’re still waiting, aren’t they? The S & P 500 is trading at over 3000 now, and probably you will never see the 1200’s again.

My point is this: The perfect time to invest was 20 years ago. The next best time is now.

So what most people do is wait for the market to drop. They pick some random percentage: “Okay, when the market falls 10% then I’ll invest.”

Buy low, sell high, right?

It doesn’t matter what you tell yourself you’re going to do, because saying you’ll invest when the market drops is much different than actually investing when the market drops.

I know, because I’ve watched people play this little game. They tell themselves they’ll “get in” after the market falls just a little bit, and then just a little bit more, and then just a little bit more.

Always waiting for the perfect time, instead of just doing the thing.

This behavior often hurts investors.

I’ve learned investing isn’t about “getting in” and “getting out.” It’s about temperament.

I have no clue where the market is headed (and no one else does either), so I’d rather focus my time on picking good investments, and then holding them indefinitely.

Therefore, once you decide you want to invest in something don’t spend years fooling around waiting for the perfect time.

Btw, I just bought index funds for $50,000, despite all my friends warned me about the stock market is at an all-time high.

Some might say I take a huge risk, and maybe they’re right. But I still believe in the stock market for the long run.

Wake me up when the S & P 500 hit the 4000-mark, will ya?

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6 Replies to “The Perfect Time To Invest & Why The Market Always Goes Up”

  1. Coming to realize that the market can’t be predicted is a challenge, no doubt.
    Have you been invested in other assets that experienced a major crisis in the past?

    I myself haven’t yet, but have tried being burned on individual stocks. Great lesson learned !

    1. route2fi says: Reply

      Thanks mate!

      Nope, I haven’t! What about you? 🙂

  2. Oh boy, this write-up is 120% true. Still it is totally difficult to do what you say. I had 20K in cash to invest over the last 2-3 months. I only bought a little (around 4K) knowing that Oct to Dec of last year was a blood bath, money managers tend to do screwy things, so will invest when market drops this fall/winter. I am yet to invest the remaining 16K (which itself came from sale of some stocks that has already run up too after the sale). Looks like I got it all wrong. The only good thing that is keeping my like a king is all the money invested over the last decade that has gone up well. I WANT the market to go down for short term selfishness without realizing that is not good to ask for that with so much at stake!

    1. route2fi says: Reply

      Thanks, mate! Interesting to hear about your thoughts!!

  3. Is there a way to edit the contents after post. Once done, we cannot correct our own post for typos/etc

    1. route2fi says: Reply

      What do you mean, mate ? 😀

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