I froze in 2020 and missed the stock market rebound – now with $750,000 left to invest, I’m choosing a different path

A Reddit poster is regretting a big mistake he made with his past investments, and he’s correcting course this time. Here’s what happened, and what he’s doing differently this time.

This is the big mistake the Reddit poster made — and how he’s changing course

The poster explained that he was in his mid-30s, and he watched the market crash during the pandemic.

Despite the fact the Wilshire 5000 Total Market index dropped 34.9% in the five weeks following February 20, 2020 and the S&P lost 33.9% of its value from February 19 to March 23, the Redditor poster opted not to take advantage of the dip and invest the $1 million he had sitting in cash.

He regrets that tremendously, given that the S&P 500 actually hit record highs only around four months after the crash, and he ended up investing into a semi-high market and watching his investments tank. 

Now, the stock market is experiencing another major crash, driven by President Trump’s new tariffs and ongoing economic uncertainty. The poster had said he’s not going to make the mistake again. He still has a million in cash, and he’s already invested $250K of it and plans to put the other $750K methodically despite feeling “that urge to freeze again, to wait and watch.”

So, is the poster smart to make this decision? 

Timing the market is often not the best approach

The Redditor is undoubtedly buying stock at a great time right now, as it’s always a good idea to try to buy when stocks are “on sale” during a crash. However, as many Reddit posters commented, the poster is also making some mistakes by:

• Trying to time the market
• Leaving so much cash uninvested unless there’s a specific reason to. 

The problem is, no one can predict exactly when the market is going to hit rock bottom or when it is going to recover. Yes, the poster has already invested $250K. However, the bulk of his money is still being kept on the sidelines. The tariff conflict could be resolved tomorrow, and stocks could soar, and the poster would have once again missed out.

If the poster is investing for the long-term, he shouldn’t be trying to decide when it’s the “perfect” time to deploy his $1 million. Unless there is some reason for having so much money in cash — like diversification or preparing for emergencies — that money should just be in the market and be left alone where it is very likely to continue growing over time even if he has some up years and some down years.

“Time in market beats timing the market,” one poster said, and another commented, “put it on auto invest and stop looking. Aren’t you investing for the long haul?”  

These posters are absolutely right. The Redditor should get his money into the market now, pick investments he’s confident in, and simply leave it alone rather than risking trying to enter or exit at the perfect time and losing out again.

A financial advisor can provide assistance and advice on what to invest in and how to allocate the assets if he needs help, so he can make the most of his funds. In the meantime, the cash is sitting on the sidelines and has likely lost ground due to inflation, so now is the time to act.  

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