At the Part Time Investor I sometimes look back at all the missed opportunities or “I wish I had…” moments when it comes to my money. For instance; waiting so long to buy a house or not buying stocks like Amazon back in 2003.
For context I graduated High School in 2002 shortly after the Dotcom Bubble burst. I was in my early to mid twenties during the Great Recession and saw my friends and family go upside down on home loans. Both of these occasions made me very hesitant to invest in anything other than my 401k.
If I had the fortitude I would have been buying Amazon every month after I graduated High School. A year of Dollar-Cost Averaging (DCA) would have netted me over a 300% return after 10 years of holding.
If I had not bought a brand new car when I was 23 while simultaneously maintaining credit card debt I could have saved for a nice down payment on a home that was near rock bottom prices.
One thing that I have noticed is I waited for markets to recover before taking action with my finances; like being in a good financial situation to buy a home or investing my money in appreciable assets and stocks. While investing has been good for me so far it could have been much better had I started earlier. I should have been buying when there was better opportunity.
- Waiting to buy a house until well after the market had recovered.
- Investing in stocks only during a bull market.
- Buying a new car off the lot.
- Maintaining credit car debt.
I know I will never be able to predict and time the market. But I now understand that buying assets and stocks in a downturn means I am buying at a discount. Time has historically shown a huge reward for those that stuck it out and still made regular contributions to a diversified portfolio or even just held. Furthermore, DCA is a time proven tool for the buy and hold investor. Having mettle and persistence will get me though the next market downturn.