Are You Worried About Investing at an All-Time Market High?
Maybe folks are worried about the yield curve, maybe it’s the political drama, or maybe they just feel it in their bones – I’ve been getting more questions about if I think now is still a good time to invest.
Well, here are some articles that may help you feel better:
What if You Only Invested at Market Peaks? by Ben Carlson. What if you were so unlucky as to invest only at the following market peaks (and suffering the subsequent drops)? As long as you kept on saving your money (putting it in cash when not at a market peak), and not selling at all, you would have actually done fine.
Bob is the world’s worst market timer.
What follows is Bob’s tale of terrible timing of his stock purchases.
Should You Invest (Or Wait) When The Stock Market Is At An All-Time-High? at Engaging-Data.com. Here is another interesting interactive tool that lets you pick any subsequent time period and see how the distribution of future returns compared if you invested at an all-time high (ATH) during that period. The market tends to spend a lot of time near all-time highs.
The key takeaway is that in the past several generations of investing, the market has done well and most of the time, the market is within 5% of its ATH. If you waited for a large dip to invest, you could be waiting for a long time and you would have missed out on a large amount of the gains.