Should I Wait Until After The End Of The World To Start Investing?

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I receive a fair number of videos, emails and articles about the coming financial crash. It is always nigh. It is always imminent. And it always involves giving up all hope of gain now in order to be prepared to gain after the world undergoes its cataclysmic change.

Here is the sixth piece of advice given by those anticipating a financial and societal breakdown:

6. Get ready for the greatest buying opportunity of your lifetime.

We would disagree.

The idea of this advice is that real goods will be going for pennies on the dollar after the dust settles from the failure of our financial systems.

The idea is that somehow, no one will have any money. And if you have something of value you will be able to buy up everyone else’s stuff.

The idea is that somehow, no one will have any dollars, even though the dollar is a fiat currency, and even though the Fed is doing the equivalent of printing money.

If we have hyper-inflation, Real goods will probably be five times more expensive than they are now, not a hundred times cheaper. Instead of paying pennies on the dollar, you will have to pay fivers on the dollar. Everyone else’s stuff  will be more, not less expensive.

Consider the change since 1970 just because of inflation.

According to the Bureau of Labor Statistics, $165,706 in 1970 has the same buying power as $1 million today.

That means your $100 of groceries today cost only $16.57 in 1970. Given that amount of inflation again and your $100 of groceries will cost $604!

And this amount of inflation has happened during the world as we know it.

The buying opportunity is today. Time in the markets is more important than timing the markets. If you own shares of companies which are producing a profit, they should, on average, appreciate over inflation. How much do you wish you had invested over any random 30 year period in the markets? How much do you wish you had invested 30 years ago today? The markets are inherently volatile but they are also inherently profitable. And the effects of the volatility are reduced over long periods of time because of the market’s reversion to the mean.

And a globally diversified portfolio is the best protection against whatever cataclysmic events that might befall the world.

At any moment in the future, you will probably look back and rightly judge that the best buying opportunities were in your past.

Therefore, our advice is to start investing now:

6. The greatest buying opportunity of your life is always right now. Start saving and investing today.

Photo by Peter used here under Flickr Creative Commons.

See also all the articles in the How To Prepare For The “Coming Financial Apocalypse” series.

Follow David John Marotta:

President, CFP®, AIF®, AAMS®

David John Marotta is the Founder and President of Marotta Wealth Management. He played for the State Department chess team at age 11, graduated from Stanford, taught Computer and Information Science, and still loves math and strategy games. In addition to his financial writing, David is a co-author of The Haunting of Bob Cratchit.