Each week you'll learn how to be a better dividend investor and follow the journey of a welder with a passion for passive income to $1,000,000 and beyond.
Share
🫣ATH Anxiety!
Published 12 months ago • 4 min read
As my finger hovered over buying the Vanguard Total Stock Market Index (VTI), I felt "ATH anxiety."
It was trading at a shade below its ATH (All-Time High) of $302.92.
VTI's 5Y price chart
If you're anything like I am, the natural urge is to wait for a pullback before buying more, right?
I like VTI, which buys the entire publicly traded U.S. stock market—almost 4,000 companies—over the S&P500 (VOO), which buys roughly the 500 largest U.S. publicly traded companies.
Both are very top-heavy, with the Mag7 accounting for almost 35% of the index, but VTI gives exposure to mid-, small-, and micro-cap companies that the S&P500 doesn't.
Either way, buying at ATH's gives me a bit of anxiety, and it really shouldn't.
"Anything can happen in America and the markets tomorrow, but we know that over time, America will move forward and grow."
-Warren Buffett, 2020 Annual Meeting
This is why Warren believes in betting on America, and whether it's VTI or VOO, we're betting on the innovation and productivity of the American economy.
Ben Carlson shared this excellent chart about investing at market peaks dating back to 1929 in "A Wealth of Common Sense":
Investing at market peaks
The chart stops on 11/30/2020, but we know what's happened since then... it's been up, up, and away!
According to this chart, if you bought the S&P500 at the peak, just before every crash, after twenty years, you would have positive returns.
It's precisely why the saying "Time in the market beats timing the market" is so true.
History tells us that you will not lose money if you have a long time horizon. However, patience—not selling and buying through the ups and downs—is key to building wealth.
And if the market is at an all-time high, it's doing exactly what we want it to—growing!
However, if there are pullbacks, we should run toward the sale and buy more because a lower cost basis means a higher total return potential, not to mention a higher margin of safety.
Dollar-cost averaging is a great way to beat ATH anxiety, too. If you work for an employer, they constantly buy at all-time highs throughout the year when they invest in our 401(K).
Research shows that going back to 1950, on average, there's a new ATH every 14 trading days!
As I close this, President Trump announced tariffs of ~25% on items from Mexico and Canada and ~10% on Chinese products and Canadian energy.
The market looked spooked at Friday's close, so we'll see if it continues this week.
Either way, if we retrace to ATHs, we should buy. And if we fall 10%, 20%, or even 40%, we should do what we can to buy even more than usual, provided we have a long enough time horizon.
Administrations come and go, but American companies figure things out, navigate headwinds, and the market will stabilize and recover.
It always has, and it always will.
If it doesn't, we have more serious problems to worry about than our stock portfolios—like a zombie apocalypse!
Good luck out there this week, my zombie-fighting friend.
I'd love you to reply to this email and share how you deal with ATH anxiety. I'll respond to every response!
😁THANK YOU to all who responded to the last newsletter!!
Wedbush Securities managing director and senior equity research analyst Dan Ives appeared on The Compound and Friends . He discussed why he thinks we're in the first inning of the AI revolution and the companies that are the best bets for investing.
🎦If you missed it, Mauldin Economics dividend analyst Kelly Green stopped by the channel to discuss some of her strategy for finding safe dividend stocks!
Click the image above, sign up for a 7-day free trial, and get $30 off!
*This is an affiliate offer, and I will receive a small commission at no additional cost when you buy a premium annual subscription after clicking the image above.
Special offer: $30 off Premium for the first year. At the end of the free trial (or immediately if you are no longer eligible for a free trial), $269 is charged automatically for the first year of your annual subscription. Auto-renews at the then current annual list price.
Each week you'll learn how to be a better dividend investor and follow the journey of a welder with a passion for passive income to $1,000,000 and beyond.
Here's your weekly helping of interesting investing information and insights. Opinion This week we hit a major milestone as our net worth crept past the $1,000,000 mark. That includes all assets like investments, savings, home equity and kids 529 college funds. We shared nine things that helped us achieve seven figures in a very quick VIDEO. What wasn't shared was that literally nothing changed in our lives from a month ago other than numbers on a screen. When I told my wife we were...
Here's your weekly helping of interesting investing information and insights. Opinion Everyone's losing their minds over the Venezuela situation, but here's where I'm at after doing a little digging: Venezuela supplies about 1% of the world's oil. The global market is oversupplied right now. Gas prices here in Illinois are at a 5-year low. So no, I'm not panicking about what this means for my wallet or my daily life. Will the capture of Maduro have consequences? Sure. Are those consequences...
Here's your weekly helping of interesting investing information and insights. What I'm Reading SCHD's Dividend Growth Formula Is Broken (For Now) SCHD used to crush other dividend funds, but it's been struggling lately—if you own it or are thinking about buying it, this article explains what went wrong and whether you should sell or buy more. Normally requires a paid SeekingAlpha subscription - I'm gifting you FREE access! Quote I'm Thinking About "Everything's amazing and nobody's happy." -...
