As a dental or medical professional, you’re likely used to making informed decisions every day when it comes to advising your patients. So it stands to reason that you want to make informed decisions when it comes to investing your hard-earned money as well. It can feel daunting trying to make investment decisions no matter what state the market is in, but you shouldn’t fear entering the market even when it’s soaring to new heights.
This does not constitute advice and advice should be sought in all instances before acting on it. The value of your investment and any income from it can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Don’t fear entering the market
At the end of January, the US stock market was nearly 3% above its previous peak. Because of the old adage ‘what goes up, must come down’ there has been an increase in anxiety among many investors about a potential downturn. Adding to the unease, some people were swayed by the high interest rates of savings accounts and shifted more of their investments to cash in 2023. It might seem like a counterintuitive idea to invest while the market is at an all-time high, but don’t let it deter you.
Why you should still invest while the market is high
History tells a compelling story. When you look at the data, it turns out that market highs are more common than most people realise.
There have been 1,176 months since January 1926, and since then, the market reached an all-time high in 354 months. This roughly translates to 30% of the time, and surprisingly, the average returns following these highs are quite favourable. Returns in the 12 month period following the high averaged 10.3% above inflation compared to 8.6% during non-high periods.
Playing the long game of investing
It’s crucial to understand that investing is a long-term game. It might cause some anxiety in the short-term when there are fluctuations that aren’t in your favour, but it’s the long-term performance that truly matters.
Staying invested in the market during the highs (and lows), can help you build substantial wealth over time. Don’t miss out on fantastic growth due to fear and stay in the game.
Key takeaways for success
If you’re looking to secure your retirement fund and future family wealth, the main takeaway here is that you shouldn’t let the fear of market highs stop you from making investment decisions.
Along with staying invested for the long-term for a chance of better returns, you should stick to the proven strategy of diversification. Diversifying your portfolio across various asset classes can help mitigate risk, and adopting a long-term perspective will let you feel peace riding out market fluctuations.
Remember, while it might seem scary to jump into the market when it’s at an all-time high, don’t let that prevent you from reaching your financial objectives. Stay informed, stay diversified, and stay invested for the long haul – your future self will thank you for it.
Meet with a professional to start investing
Our team of experts can provide personalised guidance tailored to your individual financial goals and risk tolerance. If you’re ready to start your investment journey, get your retirement plans in order, or sort out plans to build and protect your wealth, get in contact with the experts of Dental & Medical Financial Services.