Investment Strategies: Timing and Misconceptions

A common misconception is that it’s either too early or too late to start investing. Consider the example of two investors: Jane begins investing at age 25 for 10 years, while John starts at 35 and invests for 30 years. Despite investing for a shorter period, Jane’s early start allows her investments to grow to $2.2 million, surpassing John’s $2 million. This illustrates the power of starting early and the impact of compound interest.​

Additionally, small daily savings can accumulate significantly over time. For instance, saving $4 daily on discretionary expenses like coffee can grow to approximately $132,000 over 30 years, assuming a 6% annual return. This highlights the importance of mindful spending and consistent saving.​

While the stock market carries inherent risks, historical data shows that from 2001 to 2020, the S&P 500 had an annualized return of 7.5%. However, the average equity investor earned only 3% due to emotional decision-making and market timing. This underscores the value of a disciplined, long-term investment approach.​

Understanding Social Security Benefits and Taxation

Social Security benefits may be subject to taxation depending on your combined income. For single filers, if combined income is between $25,000 and $34,000, up to 50% of benefits may be taxable. For incomes above $34,000, up to 85% of benefits may be taxable. For married couples filing jointly, these thresholds are $32,000 to $44,000 for up to 50% taxation, and above $44,000 for up to 85% taxation. ​SmartAsset+1Penn Wharton Budget Model+1Penn Wharton Budget Model

Combined income includes adjusted gross income, non-taxable interest, and half of your Social Security benefits. Implementing tax planning strategies, such as Roth IRA conversions, can help manage and potentially reduce the taxable portion of your Social Security benefits.​

Strategic Timing for Claiming Social Security Benefits

The age at which you claim Social Security benefits significantly affects the monthly amount you receive. Claiming benefits before reaching full retirement age results in reduced monthly payments, while delaying benefits increases them due to delayed retirement credits. For example, claiming at age 62 may yield a monthly benefit of $1,400, whereas waiting until age 70 could increase the benefit to $2,480. Factors such as life expectancy, financial needs, and tax implications should be carefully considered when deciding the optimal time to claim benefits.​SmartAssetSocial Security

Medicare and Anticipating Healthcare Costs

It’s a misconception that Medicare fully limits out-of-pocket healthcare expenses. Without supplemental insurance, there is no cap on these costs. Healthcare expenses are projected to rise, with estimates indicating that by 2040, nearly half of couples aged 65 and older will spend over 20% of their income on healthcare. A Fidelity study estimates that a 65-year-old couple will need over $300,000 to cover medical expenses in retirement, excluding long-term care. Planning for these costs is essential to ensure financial stability in retirement.​

Maximizing Health Savings Accounts (HSAs)

Health Savings Accounts offer a tax-advantaged way to save for medical expenses. Contributions are pre-tax, the account grows tax-deferred, and withdrawals for qualified medical expenses are tax-free. For 2025, the contribution limits are $4,300 for self-only coverage and $8,550 for family coverage, with an additional $1,000 catch-up contribution for individuals aged 55 and older. It’s important to note that contributions to HSAs are not allowed once you enroll in Medicare, typically at age 65. Investing HSA funds can provide long-term growth, making them a valuable component of a comprehensive retirement plan.​Optum Bank+4Fidelity Investments+4Wolters Kluwer+4

Personalized Financial Planning with Pure Financial Advisors

Pure Financial Advisors operates on a fee-only, fiduciary model, ensuring that clients receive unbiased, comprehensive financial planning. Their collaborative approach integrates certified public accountants and financial planners to address tax planning and investment strategies tailored to individual needs. With offices in multiple locations, including Irvine, Los Angeles, and Seattle, they are committed to providing personalized financial advice to local communities.​

Accessing Retirement Planning Resources

To assist individuals in preparing for retirement, resources such as the Retirement Readiness Guide are available. This guide offers insights on Social Security, taxes, Medicare, and investment strategies, serving as a valuable tool in developing a personalized retirement roadmap.

Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.

IMPORTANT DISCLOSURES:

• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.

• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.

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I’ve learned that the key to surviving and thriving during market crashes is having a strategy in place. Without one, it’s too easy to get caught up in fear and make emotional investment decisions. That’s why I follow two core investment strategies—passive and active—which help me take advantage of the market instead of falling victim to it.

1. The Importance of a Financial Strategy

One of the biggest mistakes investors make is going into the market without a plan. It’s easy to follow random internet advice or react emotionally when stocks take a hit, but that’s a fast track to losing money. I focus on having a clear financial strategy that keeps me grounded and prevents me from making costly mistakes.

There are two approaches I use:

• Passive Investing: I follow the ABB (Always Be Buying) strategy, which means I invest consistently no matter what’s happening in the market.
• Active Investing: I apply the POOP (Panic leads to Overselling leads to Opportunity leads to Profit) strategy, which helps me find undervalued assets when markets crash.

2. My Passive Investing Strategy: ABB (Always Be Buying)

If you want long-term wealth without stressing over market fluctuations, this is the strategy I recommend.

What is ABB?

• I invest in the stock market consistently, no matter what’s happening.
• I automate my investments weekly or monthly into broad-market funds like the S&P 500 (SPY) or Total Market ETFs (VTI).
• I ignore short-term volatility and let my investments grow over time.

Why ABB Works

The stock market historically rises over time, even after major crashes. By investing consistently, I naturally buy more shares when prices are low and fewer when prices are high. This keeps me from trying (and failing) to time the market.

If you’re a passive investor like me, the best move during a crash is simple: keep buying.

3. My Active Investing Strategy: POOP (Panic → Overselling → Opportunity → Profit)

For those who want to take a more hands-on approach, here’s how I actively invest during market downturns.

What is POOP?

• Panic selling happens – People dump stocks out of fear.
• Overselling creates opportunities – Great companies get dragged down with the rest of the market.
• Opportunity arises – I look for fundamentally strong stocks that are now undervalued.
• Profit comes later – As the market recovers, these investments skyrocket in value.

Example: In March 2020, stocks like Amazon, Tesla, and Apple tanked due to the pandemic. While others sold in fear, I saw an opportunity to buy at a discount. A year later, those stocks had bounced back and delivered massive returns.

If you want to follow this strategy, the key is to analyze investments carefully before buying.

4. How I Analyze Investments Before Buying

Just because a stock is cheap doesn’t mean it’s a good buy. Before I invest, I always check:

• The CEO & Management – Is the leadership strong?
• Financial Statements – Are profits growing or shrinking?
• Earnings Reports – How has the company performed over time?
• Valuation – Is the stock overvalued or undervalued compared to historical trends?

I focus on high-quality companies that are temporarily undervalued rather than chasing anything that looks “cheap.”

5. Why Long-Term Investing Wins Every Time

No matter how I invest—passively or actively—I always think long-term.

Why?

• The S&P 500 has averaged 10% annual returns for decades.
• Even after recessions, the market always rebounds to new highs.
• The biggest gains go to those who hold steady instead of panic-selling.

Personally, I invest every single week, whether the market is up or down. I also increase my investments during downturns to take advantage of lower prices.

This strategy has allowed me to build wealth while avoiding emotional decisions.

6. Investing in Financial Education is My Best Investment

Jaspreet Singh says, “Your best investment is in yourself.” I 100% agree.

The more financial knowledge I gain, the better my investment decisions become. That’s why I:

• Read books on investing and money management.
• Follow trusted financial news sources (like Market Briefs).
• Watch finance videos to learn from experts.

If you want to build wealth and invest wisely, learning about finance is just as important as investing itself.

Final Thoughts: How to Succeed in Market Downturns

• Market crashes aren’t the end of the world—they’re an opportunity.
• If you’re a passive investor, stick to ABB (Always Be Buying).
• If you’re an active investor, look for POOP (Panic → Overselling → Opportunity → Profit).
• Don’t let emotions drive your investing decisions.
• The market always recovers, and long-term investors always win.

I follow these strategies because they help me build wealth while keeping my emotions in check. If you want to navigate market downturns successfully, I highly recommend finding an approach that fits your personality and risk tolerance.

Now, go out there and invest with confidence!

Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but he is not providing you with legal advice in this article. This article, the topics discussed, and ideas presented are Jaspreet’s opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence.

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