Is This A Good Time To Invest?

You can learn more at iselerfinancial.com, and if you have a question about money or personal finance, please send it to me by visiting iselerfinancial.com/podcast and I'll answer it in a future episode. One more thing. If you've been enjoying this podcast and would like to get my insights on money and more delivered directly to your inbox, please sign up for my Keep It Easy newsletter at iselerfinancial.com/newsletter. Just a little disclosure upfront before today's episode.

I'm recording this on Tuesday, July 29th, 2025. Any reference I make to market gains or losses is gonna be relative to market prices at the close of business on Monday, July 28th, 2025. But I'm so confident that the message I wanna share today is timeless, that I don't care that the exact numbers will be out of date by the time you hear this.

In fact, as I'll share, I think that whatever happened in the intervening weeks between when I record this and when the episode comes out hardly matters at all when it comes to how you invest your money. Okay. With that said, let's get into it. A few years ago after I had moved to Durham nc, but before I started my business, I was having lunch with an old buddy of mine.

For context, I'll mention that I always admired how my friend seemed to balance being financially responsible with prioritizing quality of life. Even in his twenties, he seemed to be operating from a different playbook than most of the people I knew. To the best of my memory, this lunch would have been sometime in 2018, and I was investing a lot of my money at that time.

So somehow, probably because of me, the conversation turned to investing and I asked my buddy what he does with his investments. And in a nutshell, he told me that he had been sitting on a fair amount of cash, but didn't know if it was the right time to invest or not. The markets seemed turbulent and risky, and in fact there was about a 16% sell off by the end of the year that most people don't even remember anymore.

And the reason people don't remember that late 2018 market decline is because of what happened over the next five and a half years. Hindsight being what it is, we can look back and know that of course, 2018 was a good time to invest. Let's say that by a complete coincidence, my buddy happened to invest some money in an S&P 500 index fund on exactly the date that it peaked in 2018. That investment would now be up about 119%. That's amazing, right? He would've more than doubled his money.

So why didn't he do it? Why was he sitting on all that cash? Well, as I mentioned, in the short term, things felt risky, and when the market dropped at the end of 2018, he probably felt pretty smart for sitting it out. But as I just said, if he had invested even at the peak of 2018, he would've more than doubled his money. This is one of the great paradoxes of investing.

It always feels like the wrong time to invest, like danger is right around the corner, while simultaneously feeling like you should have already invested at some previous date that you missed, right? It feels like the past was the best time to do it, but the present is too risky. The irony being, of course, that the past also felt risky when it was the present. One of the most common questions I get from people who are nervous about investing is, is this a good time to invest?

The fear is that you would invest your hard earned money only to watch the market drop, and some portion of that money just evaporates. Poof. And I wanna be perfectly crystal clear about this. It totally sucks when you invest your money and then the market turns against you. It's maybe not as bad as hitting your thumb with a hammer, but it hurts. Okay? So I'm not saying that people should somehow be immune to their emotions.

We're emotional creatures, and it's been well documented that we feel the pain of loss about twice as much as we feel the joy of gain. What I am saying though is that short term insecurity should not keep you from investing for your future for two reasons. The first is that the feeling of insecurity simply will never go away. If you're waiting until it feels safe to invest, you'll be waiting the rest of your life.

And like my buddy in the story, you'll miss out on all the growth that kept quietly chugging away while you were on the sidelines, waiting for it to feel safe. And the second reason I don't want you to let short-term fear keep you from investing is that in the context of the entire rest of your life, the short term does not matter. Let me say it again.

It truly does not matter what happens to your investments today or tomorrow or next week when viewed in the context of the next 10 or 20 or 50 years. I truly believe that the best time to invest your money is whenever you have extra money. Everyone should maintain a savings cushion of at least three to six months worth of expenses, and you shouldn't invest any money that you need for short-term goals like a vacation or a car purchase or a mortgage down payment, okay?

Never invest money that you need right away. But if you have more than what you need for the short term, then you should be putting it to work for you by investing it. You don't need to put it in all at once, you don't need to choose the riskiest investments, but you do need to invest your money for more and better options in the future. And the best time to do that is when you have the money. Conversely, the worst time to invest is when you don't have money.

If you're having a hard time keeping up with expenses you're up to your neck in debt, or you haven't yet built up that three to six month cushion that I talked about, don't invest. That money is needed elsewhere. Notice though that in both of those scenarios, when to invest, when not to invest, I haven't said a single word about what's happening in the stock market.

Because again, in the context of the entire rest of your life, I don't think what's happening in the markets right now matters all that much. What matters most is that you invest what you can when you can and stay invested for a long time. I wanna share some historical anecdotes from my own life to put this in perspective. So pretty much the worst thing you could do with your money from a short-term risk perspective is to invest at the peak right before a crash. That makes sense, right?

That's buying at the most expensive right before the price drops. So buying at the peak before a crash is the worst thing you can do in the short term. Okay, here's the first example. I made the decision to leave my job as a recording engineer in favor of more promising and profitable opportunities as a touring audio engineer sometime in late 2008 or early 2009.

My recording studio salary had been enough to pay my bills in relative comfort for several years, but it wasn't until my touring career took off around that time that I really started earning a decent income. Of course, this was also in the midst of the housing market collapse, which would lead to a stock market collapse, which would lead to the great recession. This was a risky time to leave a steady job for an unstable career on the road.

If ever there was a time to avoid having money tied up in the stock market, that was it. Now, I hadn't actually started investing at this time. In fact, I didn't even know it was possible for someone like me to invest. But if I had invested in an S&P 500 index fund on October 9th, 2007, the market peak before the crash, the absolute worst time to invest, that money would now be worth over 300% more than I paid for it.

To put it in more concrete terms, if I had invested a thousand dollars, I would now have over $4,000. So investing at the absolute worst time would still have tripled my money just by being patient and holding those investments. Now let's look a little further back in time. I turned 21 while playing a concert at Harvey's on the mall in Kalamazoo, Michigan, where I went to school.

Bands loaded in through the back staircase at Harvey's, which meant avoiding the ID check at the front door and, because I had been playing shows there since I was 18, the staff knew who I was at this point. And to cut to the chase, I slightly took advantage of that to order drinks that I shouldn't have been drinking at that age. I remember the look of my favorite bartender's face when we celebrated my 21st birthday from the stage, which was a mixture of both amused and angry.

Coincidentally, there was also a massive stock market sell off the previous day. See, my birthday is on tax day, and a lot of investors were selling stocks to pay taxes on gains realized in the previous year before the tax filing deadline. This was in the midst of the Dot Com Bubble in which the valuations of tech stocks plummeted 78% in seven months. If ever there was a time to avoid having money tied up in the market, that was it.

The NASDAQ 100 Index mostly tracks tech stocks, which were the hardest hit in the Dot Com Bubble. If I'd invested in a NASDAQ 100 index fund on March 10th, 2000, the market peak before the crash, the absolute worst time to invest, that investment would now be worth over 900% more than I paid for it. So if I had invested a thousand dollars on March 10th of that year, it would now be worth over $10,000.

Again, buying at the absolute worst time would still give you more than nine times your original investment if you were patient and stayed invested for the long term. Here's my last anecdote. I was very interested in post-season baseball in the autumn of 1987. My beloved Detroit Tigers, having won the championship three years prior, finished the regular season with the best record in baseball.

Despite power hitters like Chet Lemon, sweet Lou Whitaker and Kirk Gibson, the legendary double play duo of Alan Trammell and Lou Whitaker, and All Star Pitcher Jack Morris on the mound, the Tigers lost the American League Championship series four to one to the Minnesota Twins. It was a very disappointing time for me. One week later, the Dow Jones Industrial average lost 22.6% in a single day, the largest one day drop for that index up to that point.

That date would earn the ominous nickname Black Monday because it was so dark. If ever there was a time to avoid having money tied up in the market, that was it. Now I was in fact, too young to invest money in 1987, but if my parents had invested in a Dow Jones Industrial Average Index Fund on October 25th, 1987, the peak before the crash, the absolute worst time to invest, that investment would now be up over 1500%, turning a thousand dollars into more than $16,000.

So what's the takeaway from these three examples? It's that what seems like a bad, risky, turbulent time to invest, possibly the absolute worst time, doesn't really matter when you zoom out and put it in perspective to the rest of your life. It's that paradox again, it always feels risky right now while simultaneously feeling like the past was a much better, safer time to invest. So forget about the news. Forget about what the stock market is doing today or this week, or this month or this year.

The best time to invest your money is when you have it, and the best things to buy are investments that you can own for a long, long time. Okay, maybe everything I've said so far makes sense, but you still feel like you aren't sure if this is the right time. Well, luckily there are ways that you can invest that take some of the stress out of the process. One way is to choose investments that reduce short-term risk.

When I manage investments for clients, I always balance less risky investments like bond funds against riskier investments like stock funds. That way you can get the right amount of growth for you and your timeline, while also smoothing out some of the peaks and valleys along the way. Another way you can minimize short-term risk is to consistently invest a smallish amount of money in regular intervals, like weekly, every other week, or every month.

So instead of investing a thousand dollars all at once today, you could invest a hundred dollars per month for the next 10 months. By spreading out your contributions, you help reduce the risk that you'll put your money in right before a market drop. And if you automate those contributions, it can feel totally effortless. Finally, you can make investing easier by choosing investments that you can own forever, like low cost index funds.

If you choose things that you can own for the rest of your life, then you're slightly immune to the short term trends and fads that get a lot of attention in the financial media that also distract a lot of investors. In summary, short-term stock market drops feel really, really bad and truthfully are unavoidable. There's no way around that. Less visceral, but much more powerful are the long-term gains that come to those who invest in things that they can own for a very, very long time.

Instead of focusing on when to buy, just aim to consistently invest whatever you can, whenever you can. Then do that over and over again for as long as you can. It is not only one of the simplest strategies for investing, but it's also one of the best. Okay, that's it for today. Next week I'll be talking with my buddy Brad Cook. Brad is a record producer, but he and I became friends when we toured together with Sharon Van Etten back in 2014 and 15.

We have a wide ranging conversation that moves from record production to ai to the real value of financial advice to the future of blockchain contracts. I hope you'll tune in. The thing we never talk about is for educational and entertainment purposes only. It's not legal, investment or tax advice. People on the show, including myself, may have interests for or against any investments discussed, so Do yourself a favor and don't make any decisions based on what you hear on this or any podcast.

If you have a money or finance question you'd like answered in a future episode, please visit iselerfinancial.com/podcast. If you like what you hear, please like and subscribe to this show wherever you get your podcasts. And again, you can get my insights on money and more delivered directly to your inbox by subscribing to my Keep It Easy newsletter at iselerfinancial.com/newsletter. Thanks so much for listening. I appreciate you.