With the end of the year approaching, what is a better time to think about the financial world as we know it ending and much more doom and gloom. I have seen headlines everywhere over the past year all saying similar things, such as, “These Are The Stocks To Buy To Avoid The 2023 Recession,” or, “The S&P and Dow Jones Are No Longer Safe Places To Put Your Money.” Lions, tigers, and bears, oh my! Or, since we are talking about the stock market, should we just say “bears, bears, and bears, oh my!” (Just my attempt at a dad joke)
With all the doom and gloom talk, there is one thing I know for certain. Everyone who is predicting a recession will be right!
Before everyone jumps ship on me, let me explain. I believe wholeheartedly that we will go through another recession, and another one at some point after that. Everyone predicting bear markets and recessions will be correct. BUT, if you can point me to the person who can do it on a regular basis, I will give all my money to them to invest and be able to retire a billionaire.
If you cannot tell by now, I am writing this post somewhat tongue-in-cheek. I want to make sure to get everyone’s attention on a simple principle. The market will always go up. Gasp!
But Zach, I thought you just said we were going to have a recession soon?
Well, yes, we will. But eight out of ten years the market makes money. And if you are investing on a consistent basis over a long period of time, you can sleep soundly knowing that those other two years when the market is down will not have detrimental effects on your retirement.
ALERT! ALERT! ALERT! OUR TOP-SECRET APPROACH FOLLOWS: So, what do my wife and I do to protect ourselves against this super scary bear? We buy, buy, buy low-cost index funds. And when the market is up and the super sexy bull makes an appearance, we buy, buy, buy more low-cost index funds.
There you have it, our top-secret plan to investing is revealed to the world now. I do wish to make one thing clear though, I am not advocating a 100% portfolio into equities for everyone. As you have probably gathered from this website, we definitely lean that way. But there are other avenues to investing, and there is not a one-size-fits-all approach due to age and risk tolerance factors.
At the end of the day, you must develop the correct habits. Good habits are the best protection against doomsayers and the talking heads on the screen.
Cannot wait to save and invest more in 2023!
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