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Espisode 11

11: Why You Shouldn’t Aim for Perfection in Investing

In this episode we speak of the issues and fears people, especially women, tend to have around investing and how often times that fear or uncertainty leads to a late or complete lack of action taken in investing. We believe that there’s no “perfect” time to enter the market and that “time in the market is more important than timing the market.”

It’s important to look at investing as a long-game and know that even substantial dips in the market recover and yield overall great gains in the long run. This is apparent when looking back at the previous 20+ years of the S&P 500 and noting the early-2000s Dotcom crash followed by an even bigger stock market crash 7-8 years later, followed by COVID years later. In spite of these crashes and dips in the stock market, the overall trend is growth over time.

Despite the natural human tendency to avoid uncertainty and risk, the best time to enter the stock market is usually now.

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Key Topics

  • Joe from Jersey” was hesitant to invest because he was always waiting for that “perfect moment” that may have never came. (4:14)
  • The professional investors know that nobody will get every call right in this “game of numbers.” (5:42)
  • “Time in the market is better than timing the market.” Money invested should be long term money. (7:15)
  • Jeff Gundlach considers 70% a high success rate, even with an entire staff of researchers. (10:43)
  • Even professionals know that it is impossible to call investments correct all the time. (13:00)
  • The biggest barrier to being a good investor are the thoughts in our heads. (13:55)
  • “Being right early, feels an awful lot like being wrong.” Leaving the stock market. (16:10)
  • It is really almost impossible to time when to get out of the stock market. (17:10)
  • Explaining the charts of the past years of the S&P 500. (18:39)
  • Just because you know something, it doesn’t mean that the investments are going in that direction. (20:38)
  • DALBAR tracks investment performance including the average return of mutual funds, stocks, bonds, cash, hedge funds, and more. (21:14)
  • Choosing the “right” investment. How fear of making the wrong choices causes people, especially women, to make no investment decision at all. (25:05)
  • No matter how good or bad the decisions are that people make, there will always be a small segment of return that simply depends on luck. (28:12)
  • Look at the expenses of the investments that you are in and focus on diversification. (31:42)

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