“Hey, Ms. Advisor/Economist/Person I met at a party: Should I Invest My Cash Now??”
Too often, I hear questions like:
“I have some cash in my portfolio… do you think I should invest invest my cash now or wait for the market to come back down a little bit?”
(Honey, if I knew that, I’d be sitting pretty on my own island, for sure!)
“Shouldn’t I wait for the market to go back up a little bit before I invest my cash?”
(See how silly, people can’t decide if they want the market to go UP or DOWN before they invest, and this last question is a prelude to, “Oh no! I waited too long and the market left me in the dust!”)
Trying to predict the market seems like an obvious thing to do—not only could you potentially make yourself some money, but the media tends to completely support the (false) assertion that these things can, in fact, be predicted. No one can predict the future though, and even the most handsomely paid economic experts are wrong when we need them most.
This is a great video from a very smart company, Loring Ward, about why you shouldn’t worry about a few percentage points when it comes to putting your money in the market. If you’re wondering what the truth is about market predictions, watch it now!
NOTE! This advice only applies to cash that is earmarked for long-term goals–events that are 5+ years in the future.