It’s not often that you can go on vacation and come back to see you actually made money having fun, but heck that’s what just happened. Over the last month while I was out of town, the TSX has been up over 2.5%. The S&P 500 has gone up over 2%. What gives? I’m starting to think that I should leave town more often.
It seems everyday is a new record high close for the stock markets and it’s relenting. Even after 8 strong years of growth the market seems to keep on climbing like there’s no end. Yet many people still sit on the sidelines waiting for the inevitable crash that may or may not happen. Timing the market doesn’t seem to be the winning solution for these people because they are missing out on gains on a daily basis. So how do you enter a market with fear of a crash? As preached always, find a good balanced portfolio that fits your risk profile and stick with it through the good times and the bad, till death do you part.
Slow And Steady Wins The Race
Everyday I keep reading how the stock market is in a bubble and that Bitcoin is the thing I should be investing in because the value has gone over the $7000 mark. Now if the stock market is in a bubble, can someone tell me how Bitcoin isn’t?
Even on the best of years, the S&P 500 or the TSX won’t go up 100%. Not even close. Yet the price of the virtual currency keeps increasing without bounds or reason. At least with the stock market, the gains can be measured and justified. Just look at the recent earnings from big companies like Google, Microsoft, Amazon and Intel. They are making billions in profits and they keep growing. Yes, even in a stagnant economy as we have now, these multinational companies are still growing into the double digit percentages. That’s how the stock market is valued. Not by how much I say it’s worth, or what your neighbour thinks it’s worth, but by how much revenue and profit is being generated by companies that represent the stock indices.
To fit my risk appetite, I’d rather have a balanced portfolio made up of thousands of stocks rather than putting my life savings in Bitcoin. Sure I might be a millionaire by now, but could I stomach the crazy roller coaster ride? How do I even justify the price to anyone?
Don’t Hate, Join In
Most people keep blaming corporations for making big bucks, yet nothing is passed down to the little guy. It’s a shareholder’s world. The CEO and big time investors are making all the money. That’s because the regular Joe is complacent is happy to buy products made by the corporations rather than buying a piece of the corporation instead.
Just imagine buying Apple stock rather than the iPhone X. Or perhaps investing in cell phone companies like Telus and Rogers rather than upgrading to a 6GB plan for $80. I have no problems with high prices because it’s lining my pockets at the end. Why pay the corporations when they pay me? And what’s the beauty of owning the stock indices? You own everything! Shop at Best Buy? You’re paying me. Shop at Shoppers Drug Mart? You’re paying me. The best part I always like the best is when my boss pays me rent. Yes, that’s right. There’s a big chance the company you work for is in a building owned by Allied Properties. Check… got that in my REIT fund.
The importance in all this is that a little bit goes a long way. It may seem like little, but $100 a month saved up over a year is $1200. Keep doing that and you’d be surprise how fast that will grow over a 10 year period. Once the gratification comes, it becomes addictive and lure to save more to invest will come. So come join the party. Stop sulking and celebrate huge corporate profits. You know I am.