In case you’ve missed it, the stock market isn’t doing so hot as of late. The crazy returns of mid 2020 through 2021 seem to be coming to an end. I figured this day would come sooner or later and although no one has a crystal ball, the outlook isn’t super great right now. Rather than running for the hills and getting all into cash, I’m still continuing my regular cadence of buying into the stock market. Although that might seem like a bad strategy and a bad time to continue to pour money into what appears to be an impending down market, here is why I’m still doing it:

I don’t time the market

I’ve been out in the working world for about a decade now and have seen quite a few ups and quite a few downs. I graduated college shortly after the 2008 financial crisis, thankfully 3 years after when the economy was starting to come back again. I saw some really good years and some not so really good years. There have been lots of scares throughout that time frame, with the stock market falling 5-30% pretty quickly. I saw plenty of friends bail on the market (i.e. sell all their holdings) to try to sell before it hit bottom and then buy back in at the bottom, but honestly that strategy never worked so well. The future is very hard to predict and accurately predicting the top and then the bottom basically means you have to get lucky twice. From my perspective, it’s just not worth it trying to time the market and has always come back and I feel like me not selling I ended up faring better than my friends who sold and tried to re-buy in.

So, I’m still investing because I don’t try to time the market.

I’m buying at a discount

I’m a long-term investor, meaning the money I’m investing now is not money that I foresee needing tomorrow, next month or even in the next few years. If I did need that money I would not be investing it and instead keeping it more in cash or CDs (certificates of deposit, no risk). Because I’m a long-term investor, I can stand to ride out the lows and wait for the highs. If you zoom out on a stock chart in the 5 + year horizon, you’ll notice an upward trend to the right (meaning the index funds are increasing in value). With that in mind, I like to think I’m buying in today’s market at a discount compared to where I think the stock will end up years from now.

Inflation is still here

Inflation is here and although who knows how long it’ll be here, I imagine it’ll be quicker than optimistic thinkers tend to believe. You may have not noticed inflation as much in 2021 but I’ve definitely noticed it in 2022 and I imagine you might as well. Everything just seems a bit more expensive; from take-out to groceries to gas for your vehicle. If I did stop buying or even sell my stock holdings, I would have to keep it in cash, and cash is not protected against inflation meaning it’ll lose 7% this year. That’s quite the loss, and so although stocks may end up down 7%+, they might now, but if I keep my money in cash, it’ll for sure lose money this year.

This is still the best investment

I came to the conclusion that if I can’t keep my money in cash, I really must keep it in index funds for right now. Mrs. Money and I have tried to purchase real estate for an investment property and it just isn’t happening for us. We’re currently 0/7 losing out to people willing to pay more money than us (and sometimes we even bid more than we thought was a fair value!). So no cash, no real estate, honestly to me the stock market (i.e. index funds) are still the best investment! Sure they might go down in the short-term but the market has gone up on average 8% year over year in the past 100 years. That’s a tough average to beat!

Summary

Although it’s scary, although the future is very unknown, I’m still putting money into the stock market (index funds) each month!