One of the biggest dangers in investing isn’t buying stocks when they’re expensive.
It’s never buying them at all.
That may sound strange on a day when headlines are once again warning about an imminent market collapse. Veteran investor Jeremy Grantham was back in the news this morning, calling the U.S. stock market the most expensive in history and urging investors to flee equities before what he believes will be an “epic” crash driven by excessive enthusiasm surrounding artificial intelligence.
If you’ve followed the markets for any length of time, you’ve probably heard some version of this story before.
Every Bull Market Has Its Perma-Bears
Jeremy Grantham. Harry Dent. Peter Schiff. Marc Faber. Even Michael Burry, despite his legendary call ahead of the housing crisis, has spent much of the past decade warning about market crashes that never arrived.
These investors all have different approaches, but they share one thing in common - they’re almost always looking for reasons to sell instead of reasons to own great businesses.
Eventually, one of them will be right.
Markets correct. Recessions happen. Bear markets are part of investing.
But here’s the problem.
If you spend years, or even decades, waiting for a once-in-a-century collapse, you also spend years missing one of the greatest wealth-building machines ever created.
A Decade and a Half of Doom
Just think about everything investors have been told to fear over the last 15 years:
The European debt crisis, Brexit, COVID, forty-year-high inflation, the fastest interest-rate hiking cycle in modern history, regional bank failures, wars in Europe and the Middle East, and trade wars.
Every one of those events convinced some investors that the market was uninvestable.
Yet the S&P 500 kept climbing because great companies kept innovating, earnings kept growing, and the American economy kept adapting.
That’s something the perma-bears rarely talk about.
We Don't Own Headlines. We Own Innovation.
Stocks represent ownership in businesses. Businesses that solve problems, develop new technologies, improve productivity, and create wealth over time. As investors, we don’t own headlines. We own innovation.
That’s why I’ve never built my investment strategy around trying to predict the next correction.
I've built it around identifying the next great secular trends — artificial intelligence, power infrastructure, quantum computing, the space economy, humanoid robotics, preventative medicine, and autonomous systems.
Will every stock succeed? Of course not.
Will these sectors experience corrections? Absolutely.
They always do.
But that’s very different from believing investors should avoid the market altogether because valuations look high.
The Cost of Missing the Best Days
One of my favorite investing statistics is also one of the simplest.
Missing just a handful of the market’s best days over a lifetime can dramatically reduce your long-term returns. The problem is that many of those best days occur immediately after some of the worst days. Investors who panic out of the market rarely know when to get back in, and that decision often becomes far more costly than simply riding through the volatility.
I’ve said it many times before, and I believe it now more than ever.
Time in the market beats timing the market.
Does that mean stocks will move higher every day?
Of course not.
We’ll have pullbacks. We’ll have corrections. We’ll eventually have another bear market.
But history has also shown us something equally important.
The Biggest Mistake You Can Make Today
Every bear market has eventually ended.
Every major crash has eventually been followed by new highs.
And every technological revolution has rewarded the investors who stayed focused on the long term rather than the next scary headline.
That’s why I continue to believe the biggest mistake investors can make today isn’t owning too many stocks.
It’s allowing fear to keep them from owning the companies that will define the next decade.
To your future success,
Matt McCall
Founder, NXT Wave Research
