Buy Low, Sell High – that’s commons sense for how to make money with anything in which you might invest. When is the best time to invest in the Stock Market?
January 2009 would have been a pretty good time. Depending on whose numbers you look at (and whether you look at the DOW or the S&P or other indicators, the market lost almost 40% in 2008 so you were able to buy low. Although there have been a few hiccups along the way, overall, the run from 2009 to the present has been terrific. However, and I think most would agree, and we’re due for a correction sometime soon.
Over the last 29 years, I have witnessed several market corrections, the latest being the plunge in 2008. One thing you always see is many people getting in and out of the market at the exact wrong time. As mentioned above, 2009 would have been an excellent time to get in the market but many, maybe most were afraid for fear it might go even lower.
When the market is good, new investors naturally want in because their friends and co-workers are talking about how much money they are making. The last year or 2 has been a great example of this.
When the market is tanking, investors want out because of how much they are losing. When this scenario plays out, instead of buying low and selling high, the exact opposite happens. Buying high and selling low is never a good recipe for making money and it can be financially disastrous if you are close to retiring.
Most investors, including me, have a love-hate relationship with the market. On the one hand, I realize that fortunes have been made and retirement dreams realized by investing. On the other hand, I have seen the ugly side of dreams crushed and fortunes lost because the market took a plunge at just the wrong time. I know advisors who left the business because they could not take one more meeting with a client who was about to retire and lost 30% – 40% of their retirement nest egg almost overnight – do not let this be you.
If you are nearing retirement, it’s critical to take a deep dive into what you are doing with your nest egg. Is your broker advising you not to fear because we’ve always been told to “buy and hold”? Learn from 2008. Be happy with the gains earned over the last few years but be very leery of hanging on too long.
Contractually guaranteed options are available that can provide participation in market gains and capture of those gains while ensuring you will never be exposed to market risk regardless of what the market does along with an option for lifetime income.