by Larry Mroczkowski of Verve Wealth Management 920.966.9520
It’s one of the most popular pieces of investment advice, “buy low, sell high,” but with the market consistently hitting all-time highs, is buying low even an option?
Take a deep breath and then invest.
It’s human nature to be nervous about investing. But, while market downturns are painful, they’re also the nature of the beast. Former manager of the Magellan Fund Peter Lynch once said, “You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready – you won’t do well in the markets.”
While it may seem counterintuitive to invest during an all-time high, it doesn’t stop me from investing. Why? Because I know we’re bound to hit another all-time high in due time.
Decide how long you want to grow your money to find the right investment strategy.
Most investment strategies last more than five years, allowing time for growth as the market returns to all-time highs, historically speaking. Looking back at 90 years of stock market history, there were only four times – which include the 25-year wait during the Great Depression and the 5.5-year wait during the Great Recession in 2007 – that the wait to return to all-time highs took longer than five years.
Although a valid investment principle, the “buy low, sell high” maxim only goes so far. A long-term investment strategy can usually serve as a more solid basis for investment decisions compared to a short-term investment strategy, especially when the market seems consistently on the rise. If history tells us anything, new peaks are typically just around the corner.
Larry Mroczkowski (larry@VerveWealthManagement.com) is a wealth advisor at Verve and has more than 15 years of experience in the securities industry. Founded in 1937, Verve, a Credit Union, is a member-owned, not-for-profit financial cooperative with more than $800 million in assets and serving over 56,000 members at 15 locations. Learn more at verveacu.com.
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