You Can’t Buy at Yesterday’s Prices

“I’m still waiting for the collapse,” a friend told me.

“The stock market… the housing market… It all feels like a house of cards,” he continued. “Prices are just too high. I’m waiting for them to fall before I buy anything.”

Patience is a virtue when it comes to investing. When assets are soaring, biding your time until you can buy the next pullback is a fine strategy.

But that’s not what my friend was thinking…

Heading into the summer of 2024, he expected a major meltdown… something like the 2022 bear market or the pandemic-induced bust in 2020. He thought prices were artificially elevated. And he was going to wait for a 20%… 30%… or even 40% pullback before he considered investing again.

That might sound tempting. Some folks probably hoped to do the same.

But they never got that chance.

You Can’t Buy at Yesterday’s Prices
I’m not some crazy perma-bull. I don’t expect stocks to only go up from here.

Pullbacks and corrections are completely normal, even in a bull market.

But if you’re waiting on a major market collapse that will let you buy at prices similar to the bottom in 2020 or 2022… it’s not going to happen.

We’re more than halfway through the long-term, secular bull market that began in 2013. In this kind of environment, stocks don’t revisit their prior lows. They don’t give you a second chance to buy at the price you wish you’d taken advantage of years ago.

During the secular bull market of the 1980s and 1990s, the stock market never – not once – rallied off a low and then retested that low again. Once those prices were gone, they were gone for good.

As the old saying goes, “The best time to plant a tree was 20 years ago. The second-best time is now.”

Similarly, the best time to invest was just about any time in the past… And the second-best time is today.

My friend isn’t the only one who hasn’t caught up to this reality. Many investors are in the same camp. They expect – or even feel they deserve – another shot to buy at the low prices of past years. But they’ll be sorely disappointed.

And now, one trend has ensured that it will keep propelling stocks higher in the coming years…

I’m talking about the artificial-intelligence (“AI”) boom. AI is dominating the investment world. And now, it’s driving the gains of this secular bull market.

This industry accounted for roughly $90 billion worth of 2023’s corporate spending… And analysts expect data-center spending alone to top $1 trillion by 2027.

This is exactly what happened with the Internet in the 1990s. The boom needed a catalyst for its biggest gains. Today, AI is the sweeping trend that will change the world as we know it – and fuel a financial mania along the way.

With major companies spending tens of billions of dollars, this bull market will soar to unimaginable heights…

And if my friend doesn’t change his tune, he’ll miss out on massive opportunities along the way.

In short, the current market environment is poised to keep heading higher. We’re simply not going to get a second chance at the lows of previous years.

So don’t make my friend’s mistake and wait around for a better chance to buy…

The best time to act is now.

Good investing,

Brett Eversole

Source: Daily Wealth