Today marks the one-year anniversary of the stock market hitting its bottom on March 23, 2020.
At the time, there were still so many unknowns with COVID-19. In fact, the media was still calling it the Coronavirus.
A couple of days after the market hits its bottom, I wrote an article called
Click Here to Read Article: The stock market is down, time to buy?
Did I have a crystal ball?
Here are some headlines from around the world on that date.
Emergency Economic Rescue Plan in Limbo – The New York Times
NYC’s Mayor said hospitals have enough supplies to get through this week only – CNN
It’s time for investors to start saying the D-word (Depression) – this economic damage could be double 2008 – Financial Post
The timing of my article was complete luck.
There’s not a single person on earth who can honestly tell you they woke up on the morning of March 23, 2020, read those headlines, and then decided it was time to buy back into the stock market.
If anything, those headlines scream to get out of the stock market because things are about to get even worse.
What wasn’t luck, and the reason I wrote the article in the first place, was to stress the importance of having a plan.
When it comes to investing, we know that markets will fluctuate, but they will also rise over the long term.
Image Source: Ycharts
When the stock market goes through a correction, it presents a great opportunity to buy while prices are low. It doesn’t really matter when you buy, but rather that you do buy because we know the market will eventually recover.
Leave your emotions out of it
Buy low and sell high. It sounds easy to do, but in reality, it can be challenging to take action.
Read through the headlines above one more time. Most people would have felt sick to their stomach investing at that point.
Why not wait until things look better?
By the time things look better, it’s already too late. Last year’s correction was a great example of that. Here we are, a year later, and there’s still talk of a third wave, variants, and more lockdowns. In the meantime, the US stock market is 16% higher than it was before COVID.
Investing wisely is like cliff diving
It takes a certain amount of courage to be a cliff diver in Acapulco. They’re way up in the air, and they’re looking down at the water going in and out.
Jumping when the water is at its highest point would be a mistake because they’ll be landing amongst the rocks by the time they get down.
They should be jumping when they see the exposed rocks because the water will be at its highest point when they finish their dive.
It’s the same thing when it comes to investing – dive in when things are looking at their worst
If you have concerns about how your portfolio was managed over the last year, schedule a call below for a complimentary review.
