11 Jun Running the Distance: The Best Time to Invest
|Why the current economy is the best time to invest. Written by Matt Wegner Founder and Lead Counselor, Matt Wegner Financial Coaching, www.financialexcellence.net|
Is now the best time to invest?
If you’ve watched the news in the last three to six months, you’ve likely heard more than your fill of how bad the economy is and how bad investments are these days. It’s a bear market and nobody is investing because everything is so bad. This is, according to media, not the best time to invest. But did you know the stock market is actually up more than 28% in the last seven weeks? That’s right. The Dow Jones Industrial Average has risen from 6,547 on March 9th to 8,426 as I write this article. You haven’t heard about it because it doesn’t make good headlines. Investing is not a sprint. It’s a distance race. It’s a race you have to train a very long time for. You have to start small and develop good fitness and running habits. You can’t listen to all your out of shape friends as they give you bad advice. They’ll tell you if you start running you’ll have a heart attack. Or they’ll say you’ll hurt your feet or knees. Or they’ll tell you there’s a great diet pill that helps you lose weight without exercising. “Nobody exercises anymore. The quick and easy way is…” they’ll say. Maybe they’ll give you advice on their favorite running workout that they started but never finished. Get the picture? If you want to get better at running, learn from experienced runners who have been running for years. If you want to get better at investing, learn from people who have made money investing over a long period of time.Now, I’ve never been a good distance runner but when I was in the military we were regularly required to run long distances. I had to work hard to get to the point where I could hold my own. Here’s what I learned from experienced runners about how to get good at running long distances. Start first with running short distances. Gradually build up your distance until you’re used to running on a regular basis. Keeping a routine such as running at the same time every day helps keep you going and stick to it. Now you’re in the habit of running.Once you are in the habit of running you can work on improving your technique. Work on your stride, your body motion, your arm movements. Fine tune the mechanics of running to improve your time. Over time, small changes in technique can add up to make a big difference in your energy levels and speed. The more you focus on repetition and sticking to the strategy, you not only build stronger muscles but you effectively train your muscles to follow the best movements. The better you get, the more trained your muscles become, and the more they are comfortable with the movement. Even in training, though, you have good days and bad days. These are plateaus and valleys. Sometimes it takes something extra to break through the plateau but it always takes consistent, persistent “training” and sticking to a long term strategy and game plan.
The point is, you can’t let short term events dictate your long term strategy, and there is rarely a moment that can be termed ‘the best time to invest.”, especially when you’re investing for the long haul. In the last year tons of people waited until the market crashed and then sold their mutual funds to buy fixed income investments. Their short-term vision caused them to buy when things were good (buy high) and sell when things were bad (sell low). This is exactly the opposite of common sense, but when fear sets in, people do irrational things en masse. The stock market will go back up in due time, and if you want to ride the wave now is the time to buy. There’s a stiff tailwind right now waiting to push you down the long road to success. Don’t be afraid of the wind. Use it to your advantage and run with it!
– Matt Wegner