You’ve made the money – now put it to work

Your financial health begins with taking care of the present. Securing an income that covers your regular expenses and allows you to save.

Saving money allows you to think about your future. Buying a home, taking vacations, throwing a dream wedding party, or just preparing for difficult times and emergencies, all emerge as possibilities.

As you expand your horizon to a lifetime and future generations, the savings goals get bigger. Retirement. Your children’s education. Traveling the world. Your family’s longer-term financial well-being.

Saving on its own, though, is like running a marathon on one leg: you might get through to the finish line, but you’re making it slower and harder on yourself.

Investing takes your savings and grows them. Leaving your money in a savings account won’t cut it, especially in inflationary times. Investing that money to better use and thus to earn a better return is the most available way for most of us to reach our goals.

Why invest in the stock market

Once you decide to invest, the next question is: how?

Buying a home is a popular option. This comes with the benefit of providing shelter to you and your family, saving on rental payments, and the potential gains that come with increasing housing prices.

But buying a home is usually a one-off, bigger-ticket item. A down payment is not easy to cover multiple times, and in this age of high mortgage rates, the monthly mortgage payment can’t be taken for granted.

Investing in the stock market can be done starting from a lower level. The barrier of entry is much lower than a down payment. It also has tended to outperform housing prices over time, making it a smarter investment from a pure financial perspective.

Done right, investing in the stock market is a diversified approach to growing your money, a way to benefit from the growth of the U.S. and global economy over years and decades. It is a fundamental building block to growing your capital and wealth.

What about the problems with the stock market?

That said, you might still be hesitant about investing in the stock market. There are thoughtful, plausible reasons people might not want to invest. Let’s address them.

The stock market is too risky

Investing in the stock market is risky. It is a basic rule of investing that the amount you can expect to make on an investment is proportionate to the amount of risk you take.

The stock market is risky, but that risk can be controlled. Investing over a longer time horizon tends to limit the risks. Starting in the 1990s, it is very rare that someone invested in the S&P 500 via an indexing strategy will lose money over periods of 3 years or longer.

They exist – after the dot com bubble in 2000, after the great financial crisis in 2008, and very briefly at the beginning of the COVID pandemic – but historically, the stock market rebounds. Not because of magic or investor folly, but because the economy grows more productive and efficient over time, and stocks follow these fundamentals.

Strategies like reinvesting dividends or averaging one’s cost over time can also help mitigate the timing risk exhibited by those crisis periods.

The stock market is risky, and there is always the chance one’s total capital will go down. But the past 100+ years have shown that the U.S. stock market tends to rise over time, and that it tends to outperform other asset classes. This is no magic bullet or absolute law, but history can be powerful. There is nothing new under the sun, as the Ecclesiastes saying goes.

Investing too hard

Investment professionals and people who dedicate themselves to the market – like us – want to tell a Goldilocks story. We want to make investing seem exotic, overly complicated, and unapproachable for individuals, while also making it seem conquerable for professionals. That way, we can offer you a reason to invest with us instead of doing it yourself.

Our cards are on the table, then: we believe beating the market and what you would earn from passive indexing strategies is difficult, but not complicated nor impossible. We try to manage our risks to avoid the permanent loss of your money. We also seek to maintain patience and discipline so we don’t get caught up in expensive near-term manias or miss out on investments that take years to work correctly.

We’ve done that over the past 12 years in our personal investing, and believe we can offer you the benefits of our experience to overcome this challenge.

And at the same time, we offer a passive indexing service in case you would rather just track average results.

It takes too long

For investing to work, you need to stick to a strategy for years if not decades. That’s true. Meanwhile, we want to get rich quick.

The problem is, getting rich quick doesn’t really work. If someone tells you they can do that for you, watch out. Usually, the only person who gets rich from a get rich quick pitch is the person selling the idea.

How We Help

Our job at Middle Coast Investing is to give you access to passive or active investment strategies, while also solving these problems for you as best we can.

We take a long-term mindset towards investing to give you your best chance of success, and to manage the risks of investing better.

We apply our experience and knowledge to solve the difficulty of investing, while still offering you a simple, low-cost passive strategy if you prefer that.

And while there’s no shortcut to success in investing, we save you time so you can focus on what you are best at or what you enjoy most, rather than worrying about your money.

Our goal is to help you build on your financial base so that over time, you can tilt the balance of your time spent more and more in favor of doing what matters to you and the ones you love. If that sounds like it’s of use to you, contact us to set up a call and learn more.