Should I invest in this bad market? Yes!

Monthly Inflation

I think everyone has been so used economic doom and gloom in 2022 we might not have noticed what looks to be an incredible month for the economy! The last month has the US stock market up over 12%, gas prices down over 13%, and the most recent month of inflation data was flat!

I’ve seen a bit of weird politicized misinformation surrounding this 0% inflation number. July’s inflation was indeed 0%. That means CPI at the end of July was the same as at the end of June, which is a change of 0% for the month. I’ve seen some comments to the effect of “that’s not true, inflation is 8.5%!” Well, they’re both true! 8.5% is the trailing 12 months of inflation. 0% is the trailing one month. Inflation is commonly referred to as an annual number, but there’s no reason not to look at less than a year or more than a year. Since this post is looking at the change in conditions over the last month, that’s why I used the monthly number here!

This whole year I have been getting questions like “Should I invest in this bad market?!”. My answer is “Yes, invest early and often”. Specifically, the bad market you’re referring to is what has happened in the past. We don’t know what’s going to happen in the future. But if a month ago you decided to sell or stop investing due to the bad market, you would have missed out on this 12% gain. That’s over a YEAR of the average annual return. Missing huge jumps like that is catastrophic to your long term growth. That’s why it’s important to stay in the market through thick and thin. As they say, “Time IN the market beats timing the market”!

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.


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