Today is Day 23 and we are going deeper into investing week. Before we jump in, a small housekeeping note, there will be no episode this coming Sunday as it’s the Easter holiday. We’ll continue back on Monday and the series will conclude a week from tomorrow. Let’s dive in.
How Markets Recover
If you’re an investor with a diversified portfolio it makes no sense to go in and out of the market. Our goal today is to prove this to you.
As you can see from this chart, all the events we’ve lived through together over the past few decades. You can see how different events have impacted the market. As you can see, negative events like the dot-com bubble bursting make the market go down. There is a subsequent bear market, but overall we have been in a bull market for many decades. This is a good thing.
This chart shows exactly how much the market went up in the 5 years following a negative event. As you can see, the increases are extreme. So how does this impact you if you try to get cute and jump back in before the biggest gain? You’ll likely miss the biggest gains because they tend to come directly after the worst market days.
This chart shows if you investing $10,000 and left your money completely alone for nearly 4 decades you would have earned $659,515. You can follow the dramatic decreases upon missing the best days of the market. We understand how scary these times are, but messing with your money during a low can cause you major losses in the future. Please drain all your other options before you tap into your retirement account.
For more personalized guidance don’t forget that a Hey Money expert is always ready and waiting to help you sort out this mess. Use code ‘cheese’ to get a 10% discount on a monthly subscription just for being a part of the 30 day recession-proof your life program. Stay strong!
These live streams are still going strong and we still have a lot of ground to cover. To catch the live broadcasts like the Hey Money Facebook page to be alerted when Pete goes live at 2:00 pm EST daily.