Getting It Right

How do we get it right when it comes to building our investment portfolio over time? Particularly in an environment like we are seeing today…

Laying it out there, the year-to-date (YTD) performance across the market has been mostly rough. There’s been a few safe harbors (gold, for one), but coming off back-to-back strong years (20%+) in the equities markets, 2025 has put some historical trends out with the trash. Check out these returns YTD from various market indices and asset proxies in the US*:

• SPX: -10.1%

• NDX: -12.5%

• DJIA: -6.5%

• GLD (Gold-backed ETF): +20.7%

• Nasdaq Crypto Index: -22%

What’s the feel like to read, whether you already invest in the markets, or have yet to start? Probably a bit uneasy. A bit treacherous. Though what about when things are the opposite?

The last two calendar years (2023 & 2024) saw outsized returns (using SPX as the proxy / benchmark, as is common) of 24% and 23%, respectively. How did those years feel as an investor? A common response that I hear from those times (from actual conversations I’ve had with my clients and others in my network): “the market is too positive, isn’t it? Won’t it just come back down soon?”

It seems that we tend to be hesitant not only when the market is down, but also when the market is doing well. Perhaps some confirmation bias and recency bias coming into play, but how then do we get it right?

Let’s presume that “getting it right” means successfully growing your wealth by investing (in this case into stocks (aka equities)). To get it right, by definition you have to invest at some point. That much should be clear. Considering the apprehension to invest when the markets feel too low or feel too high, that’s a timing question. And a simple one to solve:

Timing investments might feel like a worthwhile endeavor, but quite funny to assume that we have enough information at any time to know when the absolute bottom of a market decline has finally occurred, or the absolute peak of a market rise has occurred. Getting those right would surely be a great deal of luck.

What isn’t luck, though, is staying invested over a long period, and making smart, planned and infrequent portfolio changes to the investments inside of it. That’s getting it right. There will always arise a reason to not want to not invest, or to want to run away from it. Understanding your investment time horizon (when you will need the cash from these investments to spend) is the supporting element here, and knowing that can give an investor the confidence to ride the inevitable ups and down of the market.

The “getting it right” is continuing to do and take the action that moves you towards your goal. If that’s building wealth through investing, getting it right = continuing to invest.

_{What are these market indices, exactly?} 

• _{SPX (S&P 500) is an index that tracks the top 500 US companies}

• _{NDX (Nasdaq-100) is an index that tracks the largest 100 non-financial US companies}

• _{DJIA is an index that tracks 30 prominent, blue-collar companies trading on the New York Stock Exchange, also one of the oldest indexes}

• _{NCI (Nasdaq Crypto Index) is an index that tracks the performance of a significant portion of the digital asset market}