Invest now or later?

“Tomorrow is promised to no one. Prioritize today accordingly.”-Gina Greenlee

As I am writing this post, the S&P 500 has rebounded almost back to the pre-pandemic crisis level. S&P 500 is currently trading at 3215 as a contrast to the trough level of 2237 on 27 March 2020.

A lot of investors are wondering whether they should be sitting on sidelines waiting for another significant drop, putting one lump sum of money, or doing the dollar-cost average style of investing at this moment.

It is a difficult question to answer. What we can learn from history, the market always goes up and there is no way you can time the market.

The best time to invest was yesterday and the next best time to do so is today. Invest today and when you look back after 10 years, it is always the correct decision to do so.

Don’t wait until you are sorry

This brings me to my story of a girl I admired during my secondary school. There was this girl whom I liked very much during my remove class in 1988. I was lucky because she was sitting beside me in the class. Even though I had a strong feelings towards her, I was too timid to tell her due to various reasons.

My childhood upbringing from a poor family made me a very introverted young guy. I had too many concerns about telling her the truth. I was worried I might be distracted from my study and failed my SPM.

Education was the only way that could change my family faith.

I waited until University ( when I knew I was finally in medical school) when I thought it was the correct time to let her know my feelings.

Finally, I had a chance to tell her when she came to Kuala Lumpur to attend her course training in 1997!

And you are right, I waited almost 9 years to let her know my feelings. You know the outcome, she was already in a relationship with another man!

There is no correct timing

The fear is perfectly understandable. The market is volatile, you are worried you might be the stupid dude that jumps in as the last person and buys the stock at the highest price.

It might be true if you are thinking of buying an individual stock. But if you stick to the principle of buying a basket of stocks and bonds, you are in good hand.

The market crash just came 3 months ago, another crash would come and go. Over your lifetime of investing, you would be seeing at least 3-5 major crashes and countless smaller crashes.

Learn to live with this volatility if you want to invest successfully. Holding stocks long term is the key to success.

No point waiting for another week, another month, or another year because you can’t time the market. The best time to do anything good and correct is NOW! You would always miss the boat if you wait!

Look at the history

History might make you feel better. Let’s look at the return of the S&P 500 over the period from 1950 to 2016.

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The stock always goes up! The problem is we are just too worried we might be the unlucky dudes who had bought at the peaks in 2000 and 2008 and found out the portfolio shrunk 40-50% after 6 months.

If you had bought in 2001 at all high, you might think that you need to wait until 2007 to recoup your losses and break-even.

You actually do not need to wait for 6 years to break even provided you invest regularly during the bear market period from 2001 till 2002 and the raging bull period from 2002 to 2007!

You would average your entry price for your purchase and likely just need to wait until 2003-2004 to get above your average purchase price.

You can’t time the market

There is no way you can time the market, you can’t predict the high and bottom. All you need to do is just invest regularly. And of course be patient.

The worst thing an investor can do is try to time the market. Correct timing doesn’t exist in the stock market.

The worst nightmare as an investor would be investing a lump sum of money in 2001 before the market crashed and waited another 5-6 years and put in more money just before another big market crash in 2008.

Stay invested at all times!

The safest bet for you to make money in the market is to stay invested at all times. Invest regularly and consistently no matter what direction the market is.

The stock market is the most powerful wealth-building asset.

But along the way, the ride can be very bumpy. If you invest today, tomorrow, one month, one year, or even 4 years from now, I can guarantee you that your wealth will be cut in half more than once in your lifetime.

History tells us there is always a bear market coming in 10-20 years time and many smaller setbacks along the way. As long as you invest regularly along the way, at the end of the day, you would be rewarded.

Before you decide to buy your first ETF, please remember that you are going to ride a wild roller coaster in stock investing. If you are not ready to see your portfolio gets cut into half and stay the course, please stay away from the stock market.

Are you ready?

If you are mentally prepared for the wild price fluctuation and ready to start investing , do it TODAY!

Don’t wait until tomorrow, next week or another 1 year. Sooner you start, better you are in long term.

 If you are willing to give up some performance, there are ways to smooth out the ride a bit. Do it with asset allocation.

Read my post about my USD portfolio. Put your money in a mixture of bonds and stocks ( equities) and keep some cash.

Invest every month and set a time horizon for at least 5-10 years.

Conclusion

‘I will do it later’ is not a time or date. It could end up being done months or years from now, or even not at all.

If you think you have made up your mind and it is a correct decision to do so, please DO IT TODAY!

Yes, I might wait for you but time won’t wait for me. So JUST DO IT!