I would definitely recommend putting your money in the stock market IF**** a major correction like losing 20-25-% in a rather short period of time wouldn’t ruin your life. If you are still young and I believe you are, I would recommend investing where you see the highest “expect value”. Meaning that you can predict what the market will do tomorrow, nobody can. But you can put your money where over the course of 30-40 years, you have a decent idea of what the returns will look like. I have been investing in the stock market since I was 18, primary in low cost vanguard index funds, but have also bought stocks of companies I believe have very strong fundamentals for growth and have done really well with them(mostly FAANG stocks). It’s not to say we’re going to huge run ups forever, but I would definitely say the current state of our economy leads most traditional market investors to believe they should expect another double digit year of returns(once again no guarantee). But the same people in real estate that will tell you not to invest in stocks because they can crash, also have people in stocks that say the same about real estate. For example, if I put my money in a bank CD currently at 1.5% or so for the rest of my life, I can expect my money to double nearly every 50 years. But oh it’s so safe!! Let’s say an index fund average returns 10%, doubles every 7+ years, and let’s say real estate every 5 years. Not to say you can’t have one bad year, or a string of bad years, but if you have the wherewithal to stick it out through potential tough times, I say chase the highest and best expected value of your money(estimate returns adjusted for level of risk). Don’t spend what little money you have on a crap D class property because I equivocate that to buy penny stocks. Potential looks great on paper until they inevitably burn you and quality investment inevitably wins long term. Even though somebody may find one indicator or reason why the market could trend significantly down in the near future, there’s been people saying the same thing for 5-8 years already and the same thing happened in the early 90’s for a crash that didn’t come for nearly 10 years. I justify my investments will, “well I know the worst could happen, but I still think the market is more likely to go up 20-30% over X amount of time before it goes down that far”. Time IN matters way more than TIMING the market.
Humans are hard wired to be loss averse, meaning we irrationally over estimate the likelihood and severity of something bad happening and underestimate the likelihood and benefit of things working out in your favor. So if you wanna be safe, put your money in a CD or bond. If you wanna grow your wealth, I’d recommend investing wisely in the market until you have enough to start buying a quality piece of cash flowing real estate with the potential to add value and get the snowball rolling. Best of luck.
