I have read some articles these last few weeks that have made me stop and think a bit more than usual about when we should start investing. This past weekend, an article in the NY Times “Even for Market Veterans, It’s Uncharted Territory” mostly said that people should buy corporate bonds, commodities and NOT stocks. And we should expect annual returns of 4-5%, instead of the 8% we got the last few years. That’s a scary thought.
Most of my clients that are concerned with their investments are focused on stemming their losses and deciding when to sell. What I am NOT hearing is “Is It Time To Invest Again?” I have been investing every month automatically on a dollar-cost averaging basis. It is something I always do, regardless of the market. However, let’s consider taking our investing a few steps further. While in Canada last month, I read an excellent article in The Calgary Globe (who knew?) by Thane Stenner, author of True Wealth: An Expert Guide for High-Net Worth Individuals. Some key points:
• “The ability to see opportunity within a crisis is a distinguishing feature of the millionaire mind.” I love this quote!
• Every time the market performed less than 2.5% a year, the next 10 years it performed amazing returns of 13.3% per year. That could be next year!
• Almost 2/3 of high-net worth individuals said they are planning to invest their cash or already have done so. Maybe you are not high-net worth but why not think like one? I do.
• Some investment areas that look attractive: you can easily own these in your mutual funds at low fees or as index funds: REITs, Large Value with dividends, and Corporate bonds.
• “Big business is hurting but it isn’t dying.”