As advisors, we get a lot of questions regarding timing. When should I buy? When should I sell? Should I wait until things settle down? You’ve probably asked yourself these questions at some point. First and foremost, I don’t believe that anyone can effectively time markets. Quite simply, if it could be done, someone would do it.
If we just look at the last 20 years, there have been plenty of reasons to be fearful of the markets. We kicked off the 21st century with Y2k, followed by a bursting bubble in internet stocks. Shortly after, we experienced the worst terrorist attack ever on American soil. Then a conflict in Iraq, oil spills, Hurricane Katrina. Then the subprime credit crisis, plunging our country into the worst recession that any of us can remember. Unemployment soared, and interest rates plummeted to zero. We teetered on fiscal cliffs, and pushed through debt ceilings. Black Monday in China and Brexit in Europe, I could go on and on. I won’t even get into COVID-19. This is by no means an exhaustive list, and it only reflects the last 20 years! Despite all of the above, the markets are sitting on fresh all-time highs (or darn close anyway). Some view this as a reason to fear.
When considering timing, the one question you should ask yourself is, “When am I going to spend this money?” Averages are averages for a reason, and over time the markets go up. Volatility works in your favor, and corrections create opportunities. The best time to invest is probably now, and if you ask me the same question 10 years from now, I will likely say the same thing. Today is January 20th, 2021. Are there reasons to fear? Sure. But if you aren’t spending this money any time soon, I would be more fearful of missing out.