A lot of investors are afraid of a huge market #crash. You shouldn't, as I'll show.
There are very simple recipes that everyone should apply in #investing that protect you from a big crash.
No stop losses, options, hedging or a fancy strategy needed.
A thread 👇(1/6)
There are very simple recipes that everyone should apply in #investing that protect you from a big crash.
No stop losses, options, hedging or a fancy strategy needed.
A thread 👇(1/6)
Let's take the worst stock market period every investor has heard of but no one of us has actually experienced: 1929, the Big Depression.
Common knowledge says that it took 25 years to recover your money. That sounds really, really scary. 😱😱😱(2/6) 👇
Common knowledge says that it took 25 years to recover your money. That sounds really, really scary. 😱😱😱(2/6) 👇
2 important elements:
1. There was deflation, so you could buy more with your $. The nominal worth of the $DJI is deceptive.
2. In 1932, the average dividend yield was 14%! Not counting them is fake.
Because of this, it only took 4 years to really recover. There's more! 👇(3/6)
1. There was deflation, so you could buy more with your $. The nominal worth of the $DJI is deceptive.
2. In 1932, the average dividend yield was 14%! Not counting them is fake.
Because of this, it only took 4 years to really recover. There's more! 👇(3/6)
You would have to be very stupid to invest all of your money at the top and never invest again.
So, suppose you would dollar-cost average, as I always advocate and you started investing in 1927, 2 years before the crash.
You invest a lump sum of $1,000 (~ $15,000 now) (4/6 )👇
So, suppose you would dollar-cost average, as I always advocate and you started investing in 1927, 2 years before the crash.
You invest a lump sum of $1,000 (~ $15,000 now) (4/6 )👇
You DCA $50 every month, the equivalent of $750 now. What do you think your return would be after a decade with the worst stock market period ever?
I guess most think that it would be a disaster, right? Make a guess, ok? For the answer and the lessons for now👇 (5/6)
I guess most think that it would be a disaster, right? Make a guess, ok? For the answer and the lessons for now👇 (5/6)
The answer is more than 10% annualized. (I used @DQYDJHQ)
The lessons are simple: if you are afraid of a crash, dollar cost average and keep your investing horizon long enough and you'll be winning when most investors are losing a lot. 💪🚀🤑
(6/6)
The lessons are simple: if you are afraid of a crash, dollar cost average and keep your investing horizon long enough and you'll be winning when most investors are losing a lot. 💪🚀🤑
(6/6)
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