"I'm still waiting for the collapse," a friend told me last month.
"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 is thinking...
He's expecting a major meltdown... something like the 2022 bear market or the pandemic-induced bust in 2020. He thinks prices are artificially elevated. And he doesn't want to buy until prices fall 20%... 30%... or even 40% from today's levels.
That might sound tempting. So I understand if you're hoping to do the same. But I've got bad news for you...
You're not going to get that chance.
Today, I'll explain why...
I'm not some crazy perma-bull. I don't expect stocks to only go up from here.
Heck, history suggests we'll likely see a 10% correction sometime this year. That's completely normal.
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 nearly two years into the current bull market. And we're a little more than halfway through the long-term, secular bull market. It began in 2013 and will likely run through the end of the decade.
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. It just doesn't happen...
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.
We're smack-dab in the middle of a secular bull market. 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
Further Reading
"When stocks are going up, they tend to keep going up," Brett writes. Some folks are nervous about the current bull run. But if you're one of them, it's time to remember a key principle of investing: Don't fight the trend... Read more here.
Many investors still have a lot of cash on the sidelines today. That tells us two things... First, we're nowhere near a market top with this kind of fear in the air. And second, this rally has plenty of room to run... Learn more here.
HIGHS AND LOWS
NEW HIGHS OF NOTE LAST WEEK
Microsoft (MSFT)... tech giant
Apple (AAPL)... tech giant
Amazon (AMZN)... online-retail king
Bank of America (BAC)... financial giant
JPMorgan Chase (JPM)... financial giant
Intercontinental Exchange (ICE)... commodity markets
H&R Block (HRB)... tax-prep company
Tyler Technologies (TYL)... government software
Universal Display (OLED)... lighting and displays
GoDaddy (GDDY)... website hosting
Commvault Systems (CVLT)... data security
Iron Mountain (IRM)... data storage REIT
Welltower (WELL)... health care REIT
New York Times (NYT)... media
Hagerty (HGTY)... collectible cars
Enstar (ESGR)... natural gas
Energy Transfer (ET)... natural gas
Targa Resources (TRGP)... natural gas
Western Midstream Partners (WES)... natural gas
NEW LOWS OF NOTE LAST WEEK
Rogers Communications (RCI)... Canadian telecom
Walgreens Boots Alliance (WBA)... retail pharmacy
Bumble (BMBL)... dating app
Papa John's (PZZA)... pizza
Krispy Kreme (DNUT)... donuts
Las Vegas Sands (LVS)... casinos and resorts
New Fortress Energy (NFE)... utilities
