- I was always nervous about investing in the stock market, so I stuck to “safe” bets, like CDs.
- But watching my brother become a millionaire changed my mind, so I followed his strategy.
- I’ve watched my money grow, and I know the market always rises. That’s why I won’t stop investing now.
I’ve never been one to get involved in the stock market. Coming of age in 2008 — as the Great Recession tanked housing prices and jobs evaporated — has always made me a low-risk investor. At first, that meant I locked my money away in CDs and low-interest savings accounts.
As I got older, however, I began to understand that such investment vehicles, while safe, were ultimately losing me money. So instead I turned to real estate. And while that has served me well throughout the years, a sour experience with a tenant left me looking for an alternative place to put my funds.
I followed my brother into the stock market
Last year I wrote an article for Insider about my millionaire brother, a college dropout whose wise investing strategies have made him a literal fortune. The money doesn’t lie. So I began to invest, too. Haltingly, at first, just a few hundred dollars whenever I had spare money lying around. I also followed everything my brother had done since I already knew it had worked for him.
And in 2021, my profits grew. Seeing them — and the speed at which they rose — was a powerful lesson in the way the stock market works. I wish I had started this before my 30s; compound interest is a magical thing.
I’m still risk-averse, which means that most of my money lies in a variety of funds. The intention of funds like these is to diversify your portfolio so that any individual loss doesn’t impact you too heavily. Although I’ve dabbled here and there with some individual stocks, I don’t want to lose everything in the event of a collapse (as occurred with my single
As the market has slumped, I’ve continued investing
It probably sounds odd, then, that as the stock market has declined steadily throughout 2022, I’ve continued to buy more. Gone are any profits I’ve ever earned; instead, I am down more than $4,000 overall. I would have lost less by keeping my money in my checking account.
But as my investment portfolio grows, so too does my knowledge about how this whole thing works. And the No. 1 lesson I’ve learned? It’s not about timing the market, it’s about time in the market.
I missed out on investing in my 20s, which is a bummer, but I’m still young, (relatively) healthy, and I have no immediate need for these funds.
Historically speaking, the market has always risen. So while I may not break even on this year’s investments, and I probably won’t see anything like a return in 2023, I can stand to wait for 10, 15, or even 20 years before needing to sell.
Because the market has dropped so heavily, I can afford to buy more of everything. And yes, I’m still losing incrementally on a daily basis, but the way I see it, everything is on sale. It may be down 30% since the beginning of the year, but it won’t stay that way forever.
So that’s why I’m putting in as much as I can now, out of all times, to invest. While others are panicking and selling, or opting for less risky investment strategies, I’m going in on the stock market. And data supports my decision: Although it took four years for the market as a whole to recover from the 2008
, it met — and surpassed — its previous value.
What my experience has taught me
I don’t claim to know everything about the stock market, but I have picked up a few things since starting all of this. My advice to people like me is this: The stock market doesn’t have to be scary. There is always some level of risk, but such is the case when you’re trying to turn some money into more money.
Index funds are generally more stable than individual stocks so you won’t feel the impact as much when the market dips. And dollar-cost averaging, where you make smaller, more regular investments rather than dropping a single lump sum all at once, is a tried-and-true strategy that reduces the impact of
. Finally, do this as early as you can. The younger, the better.
Am I a little nervous about dropping money into a declining market? Of course I am; I don’t love seeing my hard-earned cash disappear into the ether. However, I’m finally educated enough to know that this, too, shall pass. And when it does, I’m primed for a big win.