One of the biggest questions on everyone’s mind is if they should buy stocks now. When times are great and the stock market is at all-time highs, people often worry about an impending crash.
Sitting in cash: In the past, when interest rates were higher, money at least yielded a positive return. With interest rates now at rock bottom, waiting in cash for an extended time is a losing proposition.
Before the pandemic, many “experts” on TV assumed stock markets were high. After the crash and the subsequent rebound, the markets are now at higher levels.
Assuming you are sitting in cash waiting for the crash to buy stocks. How would you be able to identify a crash? Even legendary investor Warren Buffet was unable to time the fall during the pandemic
The worst thing you can do in a crash is to let your emotions take over and panic sell. Therefore before you invest in stocks, you have to understand your psychology.
You can follow a similar long timeline strategy using stocks in your retirement portfolio. Since retirement is usually 30 years away, start with an aggressive stock allocation and taper it down as you are closer to retirement.