The world has experienced many ground shaking events throughout history including:
1️. Civil Wars
2️. World Wars
3️. Cold Wars
4️. Great Depression
5️. Spanish Flu
6. 2008 Financial credit crisis
7. Trade war and nuclear disagreements
and now Covid 19.
And the list goes on and on,
Yet even through all of that chaos and panic, the stock market continues to go up over time
Now you can look at this in either 1 of 2 ways:
1️. Be mad at capitalism for continuing to reward investors, and continue to not invest out of stubborn pride.
2️. See that the stock market is a long-term wealth building machine that will always reward the patient investor who buys and holds stocks (preferably index funds), and learn how you can benefit from it
Which will you choose?
Attempting to time the stock market is a very dangerous game to play with your finances, because nobody truly knows the daily direction that the stock market will go.
People often lose money by trying to:
1️. Sell their stocks before the “bottom”
2️. Buy stocks at the “bottom”
And the main problem is that nobody knows what the true bottom was until way into the recovery.
This causes people to sell assets too quickly, while then also waiting on the sidelines too long while the market is recovering
The best approach is to either:
1️. Do absolutely nothing
2️. Buy more stocks as the market decreases
Buy and hold, buy and hold, then buy and hold some more.