I’m reminded of a quote from the great Wayne Gretzky, “You miss out on 100% of the shots that you don’t get.” And that is accurate for the markets as properly. The magic of compounding Greg talked about: You have to be in the sector to have the magic of compounding. Returns are pretty punchy in the sector. There are up days that are unpredictable, two% below, 1½%, three% there, and then it stops. And you just cannot wait around and guess when that will materialize. And at the outset I informed you that you just cannot also guess wherever valuations are higher. You just cannot suppose that it won’t materialize in the potential. And so what we say is you must get invested. Get in the markets. Get started taking part.
Now you may possibly be not comfortable doing it in a lump sum, so what we would advise is to feather it in above time. Do what’s known as dollar-expense averaging. Choose six months and place that funds to operate for you above the program of those six months. You don’t have to do it all at one time for the worry that tomorrow is the day the sector goes down. But don’t sit on it for far too long since no one understood the sector was likely to get off immediately after March, and Greg and I just cannot tell you what’s likely to materialize in 2021.
But what we can tell you is that if you’re not invested, you won’t get any optimistic return.
All investing is issue to risk, which include the doable loss of the funds you make investments.
© 2021 The Vanguard Group, Inc. All rights reserved.
“Webcast excerpt: When is the right time to begin investing?”,