Successful investing is usually about time in the market, not timing the market
When things feel uncertain, like who’s going to win the election, will the Strait of Hormuz ever open again and are we in an AI bubble? It can be tempting to press pause on any investment decisions until the future becomes a little clearer – but what if you invested at the worst possible time for 25 years and still came out ahead of where you would have been if you’d stayed on the sidelines in cash?
In an article by The Barefoot Investor, and with Vanguard running the actual numbers, let’s imagine you’re the unluckiest investor in the country.
You invest $10,000 into a diversified fund of local and global equities right before the dot-com crash.
And then, another $10,000 just before the Global Financial Crisis.
And finally, the last $10,000 just as Covid hits.
Every time, you buy at the absolute peak. $30,000 at the 3 worst moments in a generation.
So how did you do?
Today it’s worth $117,000. Yet if you kept it in cash, it would only be worth $54,000.
The worst-timed investor still doubled the one who “played it safe”.
We can’t predict the future, but we can put our money to work and use compound interest to super-charge our savings.
Contact us today to have a review with our investment adviser.
P: 03 548 3189
A: Level 1/24 Nile Street West, PO Box 432, Nelson, 7040
