You can replay everything but the market. Are you ready to enter it?

There are a lot of things you can replay.
A movie, a series, a spectacle…
Unfortunately, or fortunately (if not, there wouldn’t be a market anymore 😀 ), you can’t do that with the market.
When you miss a sequence, you can’t replay it.

In November 2020, Vanguard FTSE All-World, my principal ETF investment, which tracks more than 3000 stocks from developed and emerging countries worldwide, rose by more than 10%. And it was the case for most of the worldwide indexes.

You can replay everything but the market. Are you ready to enter it?

Don’t get me wrong, it’s easy to highlight a peak afterward.
And for many tops, there are also downs.
No one can predict them; that’s my point. And if you believe, like me, that the market always goes up long term, then it is worth being part of the live spectacle. There won’t be any chance to replay it afterward.

The 5 points to cross before buying your ticket to the life spectacle:

1.Educate yourself.
All the knowledge is available: books, blogs, training. Before making the leap, learn, understand, and find a way that works for you. Technology and knowledge bring solutions like ETF (Exchange Traded Funds) that are cheap in fees and available for everyone. I have chosen the ETF path.

 
2. Define your strategy.
Even if you go for a passive system with ETF, you still need to define the percentage of stock, bonds, and cash, and how you enter the market— a lump sum, Dollar-cost averaging, a mix of both, your broker…

In 2017, I decided to enter the market with the “all-weather portfolio”. In 2020, I simplified my approach, investing mostly in stocks through one ETF (Vanguard FTSE All-World).
I have an Evernote document where I follow my thinking process and market approach’s evolution.

3. Determine your level of risks.
The recommendations are often defined by your age. I prefer the version of JL Collins, which suggests by stages of your life. See the summary of the book The Simple Path to Wealth by J. L. Collins.

Do you still earn money?

In this case, you don’t need your investment at all, and you can adopt a more risky position (more ETF stocks than secure products). In this option, you can be old and bold with a high percentage of stock approach. 

Everyone defines their own level of risk, and it’s not always the logic that wins. Some studies prove that a lump sum is better than Dollar-cost averaging. Despite that, I was not comfortable to enter the market at once.

I used the Dollar-cost averaging by investing a fixed sum every week to enter the market progressively with the “all-weather portfolio” plan from 2017 to 2020. When Covid appeared, I switched to my one ETF stock approach and aggressively entered the market with the cash I had built in the period.

Entering the market when it goes down is an emotional competency that you can learn. And it’s a superpower. I trained myself many times before testing me live during the Covid crash. I can’t regret having learned it.
You never master it. It’s a dynamic process; each time that the market goes down, you can test yourself.

4. Select your partner/broker.
Low fees, security, and easiness are important criteria for me. The low fees are crucial. If your partner is too greedy, it will eat a big part of your potential earning. The compound effects work for your gain but also for the fees. It’s part of your research to find the right one in your country.

I mainly use InteractiveBrokers. I still have an account in Swissquote and in TrueWealth.

5. Keep going with your strategy.
You can fine-tune, tweak, even change when it’s made proactively. The idea is to follow your investment principle and not to react on emotion. Your strategy needs to be thought through with a calm mind.

When you believe that the market always goes up long term, your best friend is the time horizon.

So do you feel ready to enter the show?

As with any valuable activity, it’s challenging to start, but it has the potential to bring you a lot.

Enjoy the ride.

Disclaimer: I’m not a financial advisor. All information posted is merely for informational purposes. It is not intended as a substitute for professional advice. Should you decide to act upon any information on this website, you do so at your own risk.