Dollar-Cost-Average Your Life

One minute I'm looking up kombucha recipes. The next I'm pricing pool shock and solar panels.

I wasn’t careful. I slipped into some light doom scrolling earlier this week. I must have lingered long enough on a video explaining oil supply chain issues that the algorithm decided to shift me into a pipeline of increasingly apocalyptic prepper content. Wars and rumors of wars, resource scarcity, economic collapse, you know the deal.

I fancy myself a generally optimistic person, but I confess, with all of the doom and gloom filling my feed, I started wondering if I should stock up on some supplies… or maybe plant a victory garden… or dig a moat around my house or something.

Is this really the time to be building a business and just “living my life”? Or should I be battening down the hatches?

Whether it’s the threat of A.I. coming for our jobs, runaway healthcare costs, or all out nuclear war, there’s plenty of stuff floating around that can (and is purposefully leveraged to?) increase our anxiety and make us feel like rolling up in a defensive armadillo ball.

And while I’m a big proponent of staying (reasonably) informed and being (reasonably) prepared for emergencies, I know from first hand experience, that getting overly focused on negative things typically leads to negative outcomes.

Missed Opportunities

When the pandemic hit in early 2020, I happened to be transitioning from my old job and moving my retirement savings from one account to another. I had a lump sum of uninvested cash, right as the market started dropping.

And instead of seeing a good buying opportunity, I froze.

I kept thinking: it's going to get worse. Things are going to fall apart. I'll wait. So I waited. And the market started to recover. But this is just a temporary blip because of stimulus checks. The country is shut down. There’s no way this is sustainable. It’s going to get worse. And waited some more. And watched the market climb to record highs - and I wasn’t in it.

I missed what might have been the single best investment opportunity in my lifetime. And it wasn’t even really a failure to “seize an opportunity.” The problem was that I stopped doing what I normally did, and dug a hole instead.

I think about that a lot right now.

Dollar Cost Averaging vs the Defensive Crouch

If someone was invested in the S&P 500 over a 20-year period but missed the 10 best single days in the market, their returns would be roughly half of someone who stayed in. Even if you hit the 10 worst days, you’d still be way ahead in the long run by holding and dollar-cost-averaging (that’s when you invest on a regular schedule, regardless if the market is up or down).

When things feel uncertain, the instinct is to get small. Stop building. Stop investing. You might even divest, and hunker down and wait to see how things shake out.

But we can’t time the market, and we can’t control what happens on the world stage. We can pay attention and make strategic adjustments.

I'm not suggesting we keep our head down and ignore current affairs, or pretend that we’re insulated from what’s happening around the world. There will be challenges ahead. With my luck, as soon as I post this, all the bubbles will burst and we descend into a decade-long depression. But it would still be time to invest.

Dollar-cost-average your investments into your life and business. Keep showing up. Keep creating. Keep making connections. You’ll have bad days and missteps, but you’ll have good days of incredible growth.

We lose too much by sitting on the sidelines.

If you’re feeling anxious about anything, or you’re not sure what your next move should be, I’d love to connect and workshop a few things, or just give you some time to process what you have going on.