Don't miss out!
As I write this, on the 10th of October, the 10th month of the year, looking at about 10 working weeks left in the year, I'm struck by how fortunate we are to have made it this far.
We began 2016 with the worst stock market ever--at least for a January--and rebounded just as quickly. We began the year with nearly 20 names running for president. Now, for better or worse, we basically have two candidates. We began this year with fears of oil-armageddon as prices plummeted. And gold skyrocketed. Both have reversed course recently, without warning, without reason.
One thing remains the same: our fear. We dread this market. I hear it over and over again. As soon as someone finds out that we work with investments, they tell me, "It feels like we're due for a correction. It just feels like it." And you know what? Their feeling is as good as mine. I just cannot recommend acting on it.
Several folks have hung out in cash for quite a while waiting for this market to correct. I can only imagine that some of them have been waiting since 2008, fearing that as soon as they invest, it will plummet. Murphy's Law. Several folks have new money to invest but fear putting it in right now, waiting for a dip.
This all makes sense, as long as you value your feelings more than your money. Don't get me wrong, your feelings are valuable. Because the truth is, emotions are expensive. Some of us think stock market investing is like the lottery.
If you time the market and pull out, you have slightly less than a 50% chance of being correct. You're reaching into a lottery machine, where just under 50% of the balls bouncing around are red, losing you money, and more than half of them are black--making you money--a lot more than you lose. When you decide not to play, you hope that the machine spits out only red balls. After you see enough in a row, as random as you know it is, you might feel confident enough to play again. Playing the lottery is truly an emotional decision; investing in the market, with guidance, is entirely logical.
Here is a quick chart with proof from Athena Invest. If you invest $10,000 over roughly 40 years, 1974 to today, and never pulled out your money, you would have $800,000.
If, however, you missed only one day--the best day, every year--you would have $93,000 after 41 years of stress. You will see 41 years of presidential politics, oil crises, interest rate increases and crashes, terrorist attacks, and communist countries crashing down. The chart is worse when you miss more than one day, so I won't even mention it. Instead, think about the opposite.
88% of the returns over the past 41 years have been made in a single day, each and every year. Which day will it be this year?
Your feelings are more valuable than money. The money exists in your life to allow you to accomplish your goals, to spend quality time with your loved ones, to live within and share your values. To create, in your existence, more good feelings. To the extent that your money is causing you stress, you need to offload that. The more energy you spend worrying, the more worrying you create. Off-load that worry to the expert; it's money well spent. It's liberating your heart to feel, more deeply, what you're meant to feel.