Why "Long Term" Investing is STUPID Right Now
Do you drive through storms? ⛈️ Of course not. So why invest in it...
Had you talked to me in 2008…2015…2020…practically anytime in the last 2 decades and I would nodded my head to you in agreement “yes, in the long term the S&P 500 will go up.” And be aware, I am fully cognizant that some of you are reading this begrudgingly, thinking this is a clown statement…but hear me out. Something changed both from personal experience and monitoring mass population reactions.
If you are new to my page, my name is Timothy James, an economist and investor for the last 18 years. With over 573,000 followers on TikTok (no, I don’t dance lol), I have had the distinct privilege to directly monitor how the masses react. Thousands of comments provided a direct fundamental sentiment and behavioral analysis; a representative sample of the overall population and what they were doing. Sad to say…most bought the initial dip in early 2022, dollar cost averaged…but by the end of 2022, most people had either ran out of money, or their spirits in investing had completely dissipated. Wrecked, never to return.
And before you think that I am some guy proclaiming that I can time tops or bottoms, you can throw that notion in the garbage. I cannot. However, there are more optimal times to long term invest and times that clearly present more danger. For a simple, relatable example…the stock market is like taking a road trip. You can technically drive in a heavy storm, but wouldn’t you rather wait for clearer skies? Investing is the same - you don’t have to hit the gas during market turbulence when safer, smoother conditions will inevitably come.
Maybe you believe it…maybe you don’t…either is fine. But my personal forecast is for a dramatic drop in the markets. Personally, my estimates put that drop at -80% for the S&P 500. I know…crazy right?! Check out this TikTok post where I elaborate 10 reasons why I think the drop is coming. Now whether that drop is -80%….or -50%….or -30% is largely irrelevant. The point being…it will be substantial. Don’t believe it? Neither did Nvidia holders back in November when I posted about a massive decline in everyone’s favorite large cap…its down over -31%, shocking most holders. And frankly…I do not think it is done, in the long term. Cocky Tesla holders are down over -50% from their highs! Hundreds of stocks came nowhere near their 2021 highs in 2023 or 2024, indicating a massive divergence in the market. All of those massive individual asset losses will eventually translate over to the indexes…in time.
WHY long term investing is risky now…
So the main point…why long term investing, in my opinion, is stupid right now. And note, I am speaking exclusively about things like SPX, QQQ, SPY…the major indexes. Because I know what most people will do. They likely bought the dip, and are hemorrhaging money right now. I see it in the thousands of comments already. These are the same people calling me a clown back in December when I sold off my long term holdings. Most are dollar cost averaging right now, compounding their total account equity losses. If you are new to my page, I am a staunch advocate AGAINST dollar cost averaging. No professional investor does this…its not just me saying this. Where ever the bottom is, specifically over the next year…most will sell then.
Even though I think we will have a final blow off top leg, most will still get trapped due to the quick pace and greed over taking them. It is why I am not even attempting to trade it. This will be the bull trap of the century. From the image below, you can see