http://www.coreyphilip.com/wp-content/uploads/2017/03/why-you-should-start-investing-right-now.jpg 600 900 Corey Philip http://www.coreyphilip.com/wp-content/uploads/2017/08/corey-philip-site-300x73.png Corey Philip2017-03-26 02:57:172017-12-07 14:08:23Why You Should Be Investing Every Penny You Can RIGHT NOW!
Right now I’m flooding my brokerage accounts with money like an addict filling his veins with chemicals. It’s a bit of an extreme metaphor but I am stuffing all my pennies into investments right now. I know right now is a great time to invest. The best time I have. The only better time was 20 years ago, unfortunately my time machine is in the shop.
You’re probably wondering, why now? US stocks are in an eight year bull run, the second longest in history. This is after the second worst recession in history. On top of it all we have a lunatic for president who seems hellbent on starting a war. Most of the foreign markets are in a flatline and not showing any signs of going anywhere. Emerging markets have done nothing for most of this decade and they are riddled with fudge numbers and accounting instability. So why in the hell do I think now is a great time to invest?
Recently I was hit with the obvious like a ton of bricks. Somewhere in the midst of looking for strategies that will out perform market beta, by am mere 1% and is semi consistent at best, I went back to the basics. Time in the market beats timing the market. I lied a few sentences ago when I said my time this machine is in the shop. I don’t have one. I’ll never get back the last year I missed and I’ll never get another year to leave my funds invested.
Some of you bears are gold bugs out there might say, well yeah that sounds good but this time it’s different. This time everything is going to hell. This time it’s going down, and there will be no recovery. Well if that’s true your paper dollars or chunks of metal won’t be worth much either. But when you look at things historically, there’s always been some dark cloud in the sky. Look back to just after the great depression and we were headed in the World War II. I’m sure that didn’t seem like a great time to invest either. Then I wrote a blog post on the other last decade from 1965 to 1975 coming out of that time period, I’m sure things didn’t look like a great time doing best either but in time the markets go up.
Lets put some numbers behind it. Assume you invest $100,000 right now for 30 years and just get the market returns of 7%. In 30 years you would have $761,225.50. Now assume you fearfully sit on the sidelines and wait 5 years to invest. Now you have a 25 year horizon. That 7% gets you to $542,743.26…. that’s $200,000 less for waiting 5 years.
Im slighltly jaded because I largely missed out on the market in 2016. For those that recall, 2015 was a rocky year. The start of 2016 was even rockier with January seeing a drop and investor pessimism at all time (bearish) highs. The subsequent total return for the SP 500 in 2016 was 11.8%… 11.8% I missed out on.