"The best time to invest was yesterday. The next best time to invest is today. The worst time to invest is tomorrow." While it may be hard to look at current stock prices dropping, that can actually be a good sign to many investors out there. Even though we might be entering another recession, if you have a stable income and some extra cash, there are some reasons to invest. Disclaimer: I am not a financial advisor or expert. The following information is my perspective and for entertainment purposes only.
Easier to Buy-In
Have you ever wondered why some stock prices are so high in value? Stocks like Apple (AAPL) and Amazon (AMZN) used to be a fraction of what they are now. They got to the place where they are now because people trusted the company and the direction they were going. That means people were bidding for a higher price. While it is uncertain when the prices are going to go back up, in previous circumstances, it's safe to assume that stock prices will go up again.Owning A Share of a Company
There are several benefits to owning a stock or a share of a company. While you don't actually "control" or "own" the company, it comes with its perks. It gives you the right to vote at shareholder meetings and the ability to share your stock(s) whenever you please. Also, some companies pay "dividends", which come from their earnings. Companies aren't required to pay dividends, but it's a nice way to start earning extra cash.
Higher Return
Especially if you put your money in a mutual fund, index fund, ETF, etc, the rate of return is higher than inflation. For the past 90 years, if you invested in an S&P 500 fund, you would have garnered an average return of 9.8% every single year. Every year, it takes more money to buy certain things, we call this inflation. What that means, $10 in 2020 is going to be worth much less by the time 2030 comes around. The average rate of inflation in the United States is anywhere from 2%-3% per year. Most major banks don't even offer .5% on their savings account, which means, you are losing money. If you don't want to risk your money in the stock market, I would at least advise finding a high-interest savings account with online banks.Don't Listen to the Media
Okay, I get it. With the current scare going on, I understand why it's important to listen with what's going on, but they are scaring people to sell stocks. In the wise words of Warren Buffet, "Don't buy or sell your business based on headlines. Has the long-term outlook changed at all?" You should be investing for the long haul, not for some quick cash. Most people can't learn the art of day trading and will usually lose money quickly. Stick with investing for several years.What are your thoughts on the current stock prices? Are you going to buy in? Are you going to buy more if you're already investing? Let me know down below!
Anything Goes Monday is a new series on my blog where I talk about a topic not related to music. Anything Goes Monday will take place on the first Monday of each month. Stay tuned for more Anything Goes Mondays and let me know what you think of the segment! Check out the previous Anything Goes Monday here!
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