Ndubuisi Egwim explains why waiting for fear to fade costs investors money. The 1987 crash took weeks to recover and surpassed its pre-crash high by 1989, yet headlines stayed grim. He missed gains in 2008 by waiting for the market to feel safe instead of moving when it did.
Here's what fascinates me the most. The market in 1987 recovered. The Dow Jones recovering within weeks, passed its pre-crash high again by 1989. So within the next 2 years, it has passed its pre-crash high. This thing that felt like the end of the world eventually became just a small brief footnote in market history, or a chapter. Not because someone rang a bell and announced, okay everyone, panic is now over, you can come back to investing. No. Recovery often starts while people are still terrified. That is the part many investors miss. The market often begins recovering while headlines are still negative, which means they are waiting for certainty. If you are waiting for certainty, it often means that you are going to be missing that recovery. And that was my mistake in 2008, and I'll tell you a bit more about it. I waited for things to feel safe, but markets do not wait for your feelings to recover before they move.
