Make a Move

I often hear things like, “I’m just waiting it out. I’m going to see what happens with the market." 

The index fund legend and Vanguard founder, Jack Bogle, once said:

“Don’t do something, just stand there”

You might read that and think—by sitting in cash—you’re just following the investing legend’s advice. 

Not so fast.  

The late Mr. Bogle was urging investors to stick to their plan—let it ride when the investing times get tough.

And times are tough. As of this writing, the S&P 500 is down 20 percent—the worst first half of the year since 1970. Some of the biggest names (*cough* Netflix) are down 70 percent. In times of turmoil with stocks, at least you can turn to crypto, right? Well, it’s even worse on that front. 

Inflation is still running hot. The fed continues to raise rates aggressively—doing all they can to slow the rapid increase in everyday costs. The US housing market is slowing as mortgage rates rise. The war overseas continues to have an impact across the world.

It’s not all bad. The job market is still strong. People still have a lot of cash on hand. Household debt payments as a percentage of personal income are still historically low. Consumer sentiment is at the lowest it’s been in 50 years. Wait, that’s a good thing? It can be. The average 12 month return following a bottom in consumer sentiment is 25 percent.

Still, many worry we haven’t seen the worst in the economy or markets. That may be true. It may also be the bottom. We may be in for a rapid and euphoric recovery like in 2020. Who knows? I’m not here to tell you what’s going to happen next. 

And that’s at the core of what Jack Bogle is saying.

Stand there. Do nothing. You’re better off than taking action on things you don’t know and can’t control.

Jack is saying you should stick to your plan. But here’s the catch. He’s assuming you’ve already done something. He’s assuming you have a plan to stick with—that you’ve already started investing.

Sitting in cash hoping you’ll know what to do someday is not a plan.

Emerson once said,

“You cannot spend the day in deliberation”

In life and investing, time is either your best friend or your worst enemy. You either exploit its power or succumb to the slow and tedious pressure of its pull. It all comes down to how you use it.

Start early and keep at it and you’ll build wealth you never thought possible. Sit and wait for the right time and your wealth will wilt away without noticing—until it’s too late.

Having cash on the sideline is great. It gives you options—many doors to walk through. But those doors are worthless if you never actually walk through one.

I cannot stress enough how important it is to just start. Find an investment philosophy you can stick with. Don’t overthink it. Just get going.

Next time you think, I’m just waiting it out, ask yourself, “what am I waiting for?”. Will you really know what to look for and when to act?

Jack’s advice is great. Do nothing when everyone else is freaking out. But only after you’ve done something. Before you stand there, make a move.

Here’s to making money matter!