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Should I Invest Now or Wait? [Amid health, economic, and political uncertainty…]

At this moment, the stock market is fairly high, businesses are still shutting down left and right, and the political unrest seems to be more severe than ever. Is it really a good time to invest in the market? Many are asking the question, “Should I invest now or wait?”

Should I Invest Now or Wait? The Reasons for the Question

Times are pretty crazy right now. The question about whether people should invest now or wait is a very real one, and I certainly don’t blame them for asking.

The Pandemic

Many people are sick right now. In fact, at this very moment we’re all seeing a second wave of COVID-19 hitting the United States. Even though a vaccine has been talked about for some time, there still isn’t anything that’s readily available to the public. 

  • How long could this pandemic continue?
  • Will life ever be the same?
  • What does something like this do to the stock market if it continues to drag out?

These are the questions that many of us are asking ourselves. The truth is that nobody really knows the answers, and we’re all just left guessing.

Should I Invest Now or Wait - pinPolitical Rivalry

Oh politics… In the U.S. it’s just an ongoing battle with no clear winner. Some people love what the democrats stand for. Others adore the republican party. And, when it comes down to the issues, many of us resort to raising our voice and having a shouting match with our neighbors…or, worse yet, a punching match with them. Or you know…maybe we just decide to beat in some windows, hurt some people, and steal a bunch of stuff (that should help the overall cause, right?…). 

Political hatred (and let’s face it, just hatred in general) is consuming our nation right now, and that can’t be good long term for our country right?

Is it even worth investing in something that’s so seemingly broken?

Related: What Happens to the Economy If Biden Wins?

Economic Uncertainty

The two issues above are important, but I think this one gets the most airtime when it comes to investing — the economic uncertainty of our country.

At this moment, most businesses are still struggling. On average, companies are earning 10%-20% less than they were just a year ago. Others haven’t even been able to open their doors yet! How will these companies survive?

Well, the truth is, many aren’t surviving. Doors are being boarded up all over America, even with the help of the stimulus back in April. And, I believe many more will follow suit. 

Sure, the government can offer another stimulus that may keep companies afloat a little longer, but that can’t be the long-term solution. At some point, businesses need to operate because there’s a demand for their services. Otherwise, if the government continues to fund our economy, I believe they’re at risk of:

  • over-extending themselves on their loans,
  • which leads to printing more money,
  • then experiencing hyper-inflation,
  • and in essence…going bankrupt.

Demand can’t be dependent on the government, it needs to be supported by the people. 

(Watch out! Here comes a sidebar! I just can’t help myself. I really need to nail down this point. ;))

investDon’t believe me about the collapse of the country? Think about it this way.

  • I’m a dad. I have a daughter.
  • Let’s say I don’t have a job.
  • Thankfully, my daughter works and earns $40,000 a year (for those of you that know me, you’re right, my daughter has no job. She’s four… But let’s just ignore that and continue with this awesome example for a sec, okay?). So, she can pay my bills and we can continue to shelter ourselves, eat decent food, and have some fun once in a while.

So, with this method, life kind of works. It’s not ideal, but the bills get paid and both myself and my daughter have a means of existence. 

But then…something happens. My daughter loses her job.

Thankfully, I’ve followed the government trends for some time. I put a smile on and tell her not to worry, I’ll just pay her what her old employer used to. Then she can pay me so I can pay the bills. Boom! Problem solved!

…But Derek. That makes no sense. 

And that’s exactly the point.

The government can’t fund us so we can then, in turn, fund them. They’re losing loads of money and that can only lead to one thing…implosion.

Related: The Welfare State’s Road to Riots

(okay…sidebar over. Sorry, like I said, I just couldn’t help myself!)

The moral of the whole story is this:

  • Demand needs to drive the economy, and
  • the economy needs to be fulfilling that demand for capitalism to work

Without those two pieces, the stock market can’t continue to grow long-term.

Should I Invest Now or Wait? What’s the Answer?

At this moment, the S&P 500 is sitting at $3,270. Its all time high was $3,588 on September 2nd, 2020, which means the current market price is 10% lower than it was just a short while ago.

I currently have $250,000 invested in the stock market, so I’m definitely asking myself the same question as you are — “Should I invest now or wait?”.

Maybe I should just stop my contributions and see what happens with the sickness, the political unrest, and everything else under the sun that is weighing down the economy.

I’ve got this feeling though…and I’ve had it for a while. I simply can’t ignore it. Let me explain with the points below.

Remember What Happened Last Time

You ever wonder why Warren Buffett is such a great investor? First off, it’s because he’s fricken smart and has a photographic memory. But secondly, it’s because he’s seen the market fluctuate for years! He’s probably seen dozens of market dips in his life and he doesn’t forget what’s happened within each one of them. And this of course leads him into calculated action the next time. Not based on a hunch, but based on actual experience and recollection. 

choosing an investment firmI experienced the 2008-2009 stock market crash. The market went down 50% from its previous highs. It was madness and everyone was freaking out. The Dow was somewhere around $6,500 at the market bottom, but it soon fought its way back to $10,000 – nearly back to its previous highs before the crash. 

At that point, you know what people were saying?

“Man, I don’t know. Seems like the bottom could fall out of this market again. I’m going to wait and see what it does.”

Then, less than a decade later, people are still waiting and the market has nearly tripled in value. They missed the boat.

And Now, This Time

And then, here we go again. The Dow was at nearly $30,000, and then it tanked to $18,000. In just a short period of time, the Dow bounced back to $23,000 and continued climbing…and then here come these voices again…

“Man, I don’t know. Seems like the bottom could fall out of this market again. I’m going to wait and see what it does.”

…and then the Dow proceeded to climb to $28,000 or more. Dang, this is all very familiar, huh?

The Stock Market for Past Presidents

  • Reagan 
  • George H.W. Bush
  • Clinton 
  • George W. Bush 
  • Obama
  • Trump 

Above are the last 6 presidents of The United States. Five out of six have netted a positive stock market over their term as president. Only one has not (that was George W. Bush – mainly because of the dot com bust, Sept 11, and then the housing market bust).

On average though, the stock market has risen by 46% over the first term of these presidents, and then 41% over the second term. So basically, the market has returned a rate of nearly 10% each year.

Regardless of the president in office, the American people seem to find a way to kick butt, take some names, and prosper to an ever greater extent than they had before. We did it in the past, and we’ll likely do it again in the future.

Be Greedy When Others Are Fearful

There’s a ton of fear going around right now.

  • What if this COVID thing goes rampant?
  • What if the stock market tanks again?
  • And what if the next stimulus never goes through?

All of these questions are causing the market to go stagnant (or even go down!), but you know what? Where do you think we’ll be five years from now?

Do you think we’ll all still be hunkered in our homes, trying not to get sick and hoping every day for a handout from the big man in government?

Warren Buffett teaches us all to be greedy when others are fearful. With the level of fear going on right now, being greedy may not be such a bad idea.

single family rentalThe Alternative to Investing in the Stock Market

What if you don’t invest in the stock market right now? What would you do with your money?

  • Invest in something else….? Like real estate?
  • Keep your money in cash?
  • Piddle it away instead?

Real estate isn’t such a bad idea honestly. I’ve earned plenty of money with our rental property!

Keeping your money in cash…you don’t often win with this game. Your money earns nothing and inflation continues to eat into your purchasing power year after year.

And, piddling it away is never anyone’s intent, but it DOES happen and it likely WILL happen if you’re not careful. If you don’t invest it, you’ll probably wonder where all that money went when you look back on your life.

Related: Creating a Spending Plan…For Those That Simply Despise It

The stock market has historically been a great place to invest. And, unless something insanely crazy happens to our country, it will likely continue to be a great place to invest.

Should I Wait to Invest in the Stock Market? My Sensing…

Businesses aren’t thriving right now. Basically, the whole world is on pause just waiting to see if this whole pandemic will be solved soon. 

I have this feeling (and keep in mind it’s just my opinion – you’re entitled to do whatever it is you want to do) that the stock market is equivalent to a massive rocket right now.

The countdown on the rocket launch has gone something like this: 

  • 10
  • 9
  • 8
  • 7
  • 6
  • 5
  • 4
  • 3
  • 3
  • and ….3…..

The rocket (ie. the economy) is stuck, but everything is on and ready to erupt! When the vaccine comes and the fear level comes down among the people, our economy is going to shoot off at a rate that none of us have ever seen before (and you know what? I think that rocket will break records irregardless of which president is sitting in the White House)!

Related: U.S. Economy Could Boom in 2021 Like It Did After World War II

The Dow is going to hit $30,000 and soon breach $40,000 (again, just my opinion).

Those that were sitting on the sidelines are going to be kicking themselves once again. 

Me, I’m basically all-in. I’m still loading $5,000 into the stock market every single week (mainly S&P Index funds through Vanguard). Right not, I’m buying stocks at a 10% discount. Ten years from now, I’m almost certain I’ll be happy I did!

Should I Invest Now or Wait? What’s Your Take?

You heard my take. I really want to hear from you now. 

Are you investing money at this moment? Or are you waiting for some reason? And, if you’re waiting, what are you waiting for?

  • Is there a defining point where you say, “Boom, there it is, it’s time to invest now!”?
  • Or…are you waiting without a defined purpose?

If you’re waiting for something, but not sure what, beware. Why? Because you might be waiting forever and then eventually looking back thinking, “Man, I wish I would have invested…”

Where are you with the question, “Should I invest now or wait?” Let’s talk about it in the comments below!

Grow Rich Money

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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