Don’t wait for the next stock market crash to get rich!
Many investors are scared to death of the stock market right now. No one wants to invest in the all-time highs to see the subsequent collapse as soon as they invest their money. And now, more than ever, it seems that everyone thinks that the next stock market crash will happen at any moment.
But there is one simple truth about investing: Anyone can get rich on the stock market. A solid long-term investment strategy, the time and discipline to stick to it – this is usually all it takes to succeed. What stops many people from turning their financial dreams into reality is the fear – the fear of the next stock market crash.
If you want to overcome this fear, you need to learn two things about the stock market:
First, market failures are inevitable. Point.
But second and more importantly, these catastrophic events do not happen as often as you might think, and they are often just an obstacle on the way to potentially life-changing wealth for equity investors.
In the following lines, I will share my secret to overcoming the fear of market failure, and you can also take advantage of it.
The nonsense of predicting the next stock market crash
Stock market crashes happen from time to time. They are inevitable. If you invest long enough, you will end up experiencing more than one.
It is only natural that we want to be able to predict when this will happen. This way, you will be able to sell at the highest prices just before the decline and then return to the market at the lowest prices. Maybe the eternal dream of investors. 🙂
The problem is that there is always a reason to expect an inevitable stock market crash. When you look back on the past year, almost every bear call seemed perfectly reasonable at the time. But listening to them only cost investors a chance for a greater return.
May 2020: Fear of double immersion
Immediately after the market crash in February and March 2020, shares began to recover. Many observers and analysts at the time were sceptical, arguing that the second crash was just around the corner.
And at that moment, these views seemed perfectly reasonable. Tens of millions of people were out of work, there was no end to the blockage of business, and fears of new waves of COVID-19 cases challenged the ability of the Federal Government and the Federal Reserve to take sufficient incentives to keep the economy afloat.
However, if you expected the crash to happen in a few weeks or months, you were probably very disappointed. In the four months from early May to late August, the S&P 500 jumped 24%, and many individual stocks performed far better. You can see how our portfolio presented itself at that time here.
September 2020: Fear of irrational markets, political chaos and vaccine failures
September brought a slight correction, which gave a new impetus to the predictors of the Last Judgment. It was easy to see the new catalysts as a cause for concern, including the presidential election and the slow progress towards a working coronavirus vaccine.
Once again, however, if you thought there would be a collapse before the end of the year, you were wrong. S&P rose another 10% between the end of August and New Year’s Eve. Those who sold at low prices just before the November elections missed a return of another 15% and even more.
January 2021: Surprise in Washington
People around the world are eager to leave 2020 behind. Still, nervous investors thought the strong market in 2020 slowed the inevitable, and some expected a rapid catastrophe to begin in early 2021. Concerns included the slow release of vaccines, Senate elections and the potential for unrest as they changed. The presidents of the United States.
The accident did not happen. There is some volatility in the stock market, but in just six weeks, the S&P 500 has risen another 6%.
Face your fear
Looking back in this way in past predictions highlights some exciting things. First, those who make predictions have often been right about specific events. May forecasts for a rise in the cases of COVID-19 turned out to be correct. The vaccines took longer than they hoped to get approved, and their spread was painfully slow. Control of the US Senate has really changed, and there have been riots in Washington.
But what the forecasts confused was the impact of all this on the stock market.
Second, the cost of submitting fear is prohibitively high.
The S&P 500 is almost doubled from its lowest point in March last year.. It will have to collapse by more than 40% to return to these levels. Even if a 20% collapse occurs, it will only lead to the levels at which it traded last July.
And lastly, the only time when people didn’t anticipate a stock market crash was before the 2020 crash happened. Of course, several predictions suggested that the end of the decade-long bullish market would have to happen eventually. But they were short and superficial, and in fact, they specified absolutely nothing.
Accept the next stock market crash.
Most importantly, the stock market crash in 2020 did not undermine the financial hopes of long-term investors. Those that remained on the market and withstood the ups and downs are probably much better than before the crash. At least this is the case with our investment portfolio!
There will be a stock market crash in the future. It will not be fun at all, and it will be difficult to pass because all market failures are difficult to withstand.
But don’t let the next catastrophe become the catalyst that stops you from investing.
Your future wealth is at stake!
I would say that the only thing you need to fear is that your fear will be what prevents you from having the financial life you have always wanted.