I'm really struggling psychologically with investing concerns and need to get some perspective. The problems are the Past and the Future, and both effective our financial sense of well-being.
Other than some employer-contributed investments, my wife and didn't invest so far in our life other than CDs and other guaranteed small returns (though at one point CDs were at 5%). But during this time we sat on a large amount of cash, hundreds of thousands of dollars, almost all of which was earned through working, year by year, and scrimping. Lots of self denial, bargain shopping, etc.
But during those years, obviously, we missed out on an incredible bull market. For various odd/complex psychological reasons, I didn't "wake up" to that fact until fairly recently, and the realization has made me sick. We're middle aged, and based on our current cash savings, some future inheritance, and what we would have made in the market we could have:
- retired by now.
- not scrimped so much all those years (including living in some questionable homes!).
Further, My wife is now entertaining taking a job that she truly doesn't want to do because it pays so well. Again, had we invested, she very likely would not have to ever consider taking any job, let alone one that she is doing mostly under protest. Likewise, I am going to have to look for work I don't really want to do, either. She also is an international person and so we also could have had two (small, humble) homes, one in each of our countries, by now, had we invested.
Up until fairly recently, I thought we had done quite well, having saved up so much. But now I realize we have been complete abject idiots! She's taking it in stride, but I get these waves of regret and sort of anxiety over it.
Any perspective that can help?
Of course, now it seems I want to stop the bleeding and get into the market. I opened an IRA and put a small amount in it from last year's earnings, just about $9k...but as I started considering the market I talked to a friend who pulled out of the market around the last election, thinking the market would go down because of Shiller's high CAPE warning, Trump's policies, etc. He is well aware that he lost out on double digit % returns since even then. I wasn't even "awake" yet until well after that but have still misssed out on good returns, but now I am fearful:
I am fearful that, having waited out this amazing bull market, I'm going to dump our life savings into an index fund...only to have the market "correct" or pull a 2008 or 2001 or whatever.
I feel that would feel far worse than a person who had made tons of returns during this runup and then it got pulled back--because at least he would have made some money to lose. I'd be losing all earned income that was saved through scrimping.
And yet I'm also aware of "time in market beats timing the market", that doom and gloom predictions are commonly wrong, maybe the Shiller CAPE isn't as applicable this time, etc., etc. And so I'd hate to stay out even more and just continue to miss out.
We also may--not sure--by a home or two (small, each) in our countries in the next 1-5 years, and so wouldn't want to have to be waiting for a recovery to access our cash. But again, I'm not sure. Otherwise, we have no particular spending needs: my parents are dead, hers are alive in a socialized medicine country, we have and will have no children, and we're frugal.
So: Any advice for a person in my boat?
[And I know I shouldn't complain, in that we do have cash savings, whereas many people have $0 or are in debt. But we got it the hard way]