You Will Never Time The Market Perfectly… And that’s OK!
Sorry to be the one to break this to you, but you are never going to time the market correctly. Someone will. That is just how these things work. But it won’t be you. Ever.
And here’s the thing: “That’s ok!”
When it comes to investing and building your personal wealth empire (yes, you need to call it your empire because we don’t think small anymore), it is important to remember that you are not searching for perfection. Instead, you are searching for improvement.
Steph Curry is the best basketball shooter I have ever seen. Even he doesn’t make every shot.
Warren Buffett is the greatest investor we have ever seen, even he loses money on some deals.
Perfection is not the goal because perfection is impossible.
Improvement is the goal.
Seeking perfection leads to paralysis by analysis. You need to stop worrying about the decimals and start focusing on the commas.
Afraid to buy a house because the market might go down? It might. But over time it always goes up. So just plan on holding onto your house for a long enough time and you are improving your odds of a positive return.
Same thing goes for stocks. Not every stock goes up in perpetuity. But over time, most do. Rarely do stocks of well-known companies go to zero. It happens, but not often.
You don’t need to buy a company’s IPO in order to make money in their stock. You don’t need to be the seed investor in a start-up in order to make money during its lifetime. You don’t have to buy at the bottom to see a positive return.
Quick question: 30 years from now, do you think Disney will be more valuable or worth nothing?
What about Apple?
What about Facebook?
What about Exxon Mobile?
How much risk tolerance do you really have? If your investment falls in value 15% are you going to panic or buy more? What if it goes down 50%?
The people who tell me they are waiting for prices to come down further before they buy (a house, stock or anything) are the same people who panic when prices do come down. Whatever you expect to happen, will happen, because you will only focus on the events that support your expectations.
“See! I knew stocks would fall!” Well yes, they always fall. Warren Buffett refers to this as “the market is on sale.” But even he doesn’t buy at the exact bottom. And you won’t either.
But you can buy today. And a little next week. And a little more after that. And if you do this little by little every week you will see up markets and you will see down markets. But like climbing a set up stairs you will continue to rise above where you are today.
Getting just 1% better every week will have incredible results. But I am sorry to be the one to have to tell you that you’re mother was wrong. You aren’t perfect and never will be. And that’s ok!
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