People are always scared the market is about to crash. They get so caught up in trying to avoid the next big crash, they end up sitting on the sidelines and missing out on gains.
The reality is the market crashes all the time. Attempting to pick the exact right moment to invest is impossible. So, invest as soon as you can and start letting compound growth work its magic. It won’t be a straight line up. There will be plenty of big bumps. But your future self will be very grateful you kept on investing.
Since 1950, the S&P 500 has fallen by 10% or more 39 times. Each of these market drops felt uniquely terrible. But, you must not let these deter you from investing. No matter what is happening in the markets, keep investing a portion of every paycheck.
The graph is a log graph of $1 invested in the S&P 500 in the year 1950. We listed all of the market crashes that were 15% or more. We wanted to list all the 10% or more crashes, but there were too many to fit on the graph! We removed the Y-axis, but it shows $1 growing to over $1,000!
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Vivi & Shane
