It’s All About Time in the Market, Not Timing the Market

One of the questions we get here at Stash when the market goes down is, “Should I sell?” Here’s my perspective, which I’ve formed over the last 18 years working in finance.

Will the market go up and down? YES. The market will go up and it will go down, and sometimes it will trade sideways. Right now the markets are facing some political noise. And often with noise comes volatility, or turbulence.

Long-term investors shouldn’t be concerned with timing the market. I’ve said this before and I’ll keep saying it — no one can predict exactly what the market will do tomorrow or next week.

No matter what the market does, continue to buy small amounts of your investments on a regular basis.

I’ve invested through a lot of market cycles and trust me, if an investment professional tries to sell you on a magic formula to crack the market, I recommend contacting the U.S. Securities and Exchange Commission immediately.

No matter what the market does, continue to buy small amounts of your investments on a regular basis. This is called dollar-cost averaging and it’s really important.  On Stash, we have $5 investment minimums so you can consistently buy small amounts of your investments.

Consider market fluctuations as opportunities to continue adding to your portfolio at lower prices. If the market keeps dropping, keep adding those little amounts. If the market goes up, keep adding those little amounts.

Take a look at these examples from the last 10 to 20 years:  

The past 15 years have been turbulent and these charts reflect how the market responded. You’ll see gains and declines through the dotcom bust, 9/11, the Great Recession, wars in Iraq and Afghanistan, and three separate presidential administrations. But staying the course has proved to be the way to go.

Imagine if you’d bought small amounts of these investments all through these ups and downs. You would have harnessed the gains from when the market was up, and bought more when the market was down.

My point is that no one could have predicted these past events. And no one can predict the future. Investing consistently over time is a strategy you can use for the long term.

We are your investment adviser and our interest is in looking out for you, helping you to save and invest. Although we can’t predict the future, try not to sweat the ups and downs.

Turn on Recurring Transactions to make sure you keep investing through every market cycle.

It’s all about the time you are in the market that counts, not how you time it.

Keep Stashing,

Brandon Krieg
CEO, Stash