The end is coming! The recession is right around the corner! Experts say to not invest in stocks! Analysts predict the stock market will crash this year! With the rise of social media and easy access to the news on our phones, it’s easy to get bombarded with news articles creating fear in retail investors like you. In this post, we’re going to shed some lights on all of these articles, help you determine which keywords to watch out for, calm your fears in the stock market, and see the bigger picture in investing for the long term and building your wealth.
Look, I’m not going to lie, but when I first started investing, I used to get so freaked out seeing all these articles on my feed, especially when I read them during a pullback or a deep correction. I would see the words, “experts say” or “analysts predict” and think, “they must be right since they’re experts and analysts, and understanding the stock market is their profession!” But with my luck, most of the times I fell for these articles and decided to not invest during my monthly routine, it seemed that the stock market would still retrace, leaving me in dust with all my fundamentally strong stocks skyrocketing forward.
Let’s take a look at this chart of the S&P500 over the past 10 plus years. Remember, stock market pullbacks and corrections are totally natural and are often healthy, making sure that the value of stocks are steadily rising, and not sharply overbought or oversold.
Over the past 25-30 years, the stock market has gained an average of around 7-10% each year, even with all the elections, health crises, natural disasters, terrorist attacks, presidential tweets, trade wars, inflation, social media scandals, and even all the Souplantation locations closing down, which I still can’t believe happened. I mean seriously, where can you get an all-you-can-eat tuna tarragon salad and chicken noodle soup for only $7.99?
So, looking at the history of the S&P500, a lot of interesting articles came out trying to cause fear (feel free to Google these articles):
At the end of 2009, an article labeled, “US Economy To Slow Next Year” came out on CNBC and guess what? The markets began one of it’s longest running bull markets.
In mid 2011, an article labeled “Stocks To Tumble Another 20%, Cash the Safest Place” was published, and well look at that, stocks retraced again.
In 2012, “Time Bomb? Banks Pressured to Buy Government Debt.”
In 2014, “2014 Crash Will be Worse That 1987’s: Marc Faber.” In 2016, “A Recession Worse Than 2008 Is Coming.”
Here’s one of my favorites: in 2018, an article labeled, “The Worst is Yet to Come: Experts Say A Global Bear Market Is Just Getting Started” came out and literally days after, a whole bunch of stocks rallied 10-20%.
I know that when I see keywords in a title like “market crash,” “recession coming,” or “doomsday,” it’s most likely another clickbait article trying to lure and panic the stock market newbies. Of course, a couple of these so-called experts will call it right and a pullback or correction will actually happen, not because they actually knew when no one else could have predicted it, but because the stock market was bound to pullback anyway. And when these so-called experts “call it right,” they get praised by the media and articles following their prophecies will say something like, “The Man Who Predicted the Economic Meltdown” or “Man Who Predicted The Global Collapse Just Warned It’s Going To Get Very Scary Before This Is Over.”
Look, with all these news articles, just take it with a grain of salt. Instead of worrying and being fearful of the stock market, we encourage you guys to focus on investing in companies with strong fundamentals, like if they’re making consistently increasing amounts of revenue quarter over quarter and year over year and have a wide economic moat, giving them an advantage over other companies and during a variety of geopolitical and economic events.
In the end, it’s important to ask yourself what your investing goals are. Are you investing for the next few months? 5 years? Or 10 years? Where do you see the value of the companies in the future? Stock market gyrations, pullbacks, corrections, bear markets, crashes, and recessions are normal. They will always happen, but you don’t have to be afraid or try to time the market. Just be patient and invest in companies with strong fundamentals little by little, and you’ll see growth in the long run.
If you’re new to the stock market, congratulations! This is where the majority of wealth is built for most self-made millionaires. If you’re interested in learning how to invest and trade stocks with a very simple and safe approach, we have a free introductory class right here on our site that you might want to check out. We not only teach you how to invest, but also how to sell covered calls, which you can easily make a couple of hundred or thousands of dollars each month just by selling rights to others to buy your stocks. We also have weekly content where we update you on what we’re investing and trading in and we can answer questions that you send to us. It is ultimately our goal to teach you how to grow your wealth, develop a healthy wealth mindset, and ultimately reach financial freedom so you can spend more time with your friends and family and financially help those around you.
Here at www.calltoleap.com, we strive to educate the ways to get to financial independence. If you want to learn, sign up for free to access the Intro courses and if you want to take it a step further with selling covered calls to generate income, sign up for our standard membership here!