I started Personal Finance Club in 2019. And just in those short three years, I’ve heard countless fears about why it’s not a good time to invest. In addition to what’s listed in this graphic, just in THESE THREE YEARS we have:
• Federal government shutdown
• Failure to raise the debt ceiling
• US credit rating downgraded
• Presidential impeachment
• Inverted yield curves
• George Floyd protests
• Attack on the US capital
• Withdrawal from Afghanistan
For every one of these events (and many more) I had countless people make statements like. “It’s not a good idea to get invest with ____ going on”. And while many of these events are tragic, they absolutely should not be used as a basis on which to predict the direction of the market. Reading the headlines and guessing which way the market will is tempting. In March of 2020, we all KNEW the pandemic was going to get worse, along with supply chain issues, massive layoffs, crippling economic ripple effects, etc. Yet, the market is up 27% PER YEAR since then.
So no. It’s not time to panic. It’s time to do what we always should be doing to maximize our wealth. Invest like a sociopathic robot. Set up automatic contributions, and leave them alone for decades. Don’t sell anything until you retire, then sell just a little at a time. With that strategy you’ll end up with way more money and never need to worry about how the headlines will impact your investments.
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.