If you’ve been following this blog, you know that I’ve been wavering in indecision about what to do with my excess cash. Sitting on it earning 1% interest is a terrible option because I’m actually losing money due to inflation and I can earn more than that on basically all of the stocks that I own because of the dividend, no matter what the actual stock price is. And you’d also know that I eventually decided to just buy some stocks, adding to some of my previous 1/2 positions and not stress about the “crash” that everyone thinks is coming, since I’m actually investing for the long, long term and I care more about dividends than I do the actual stock price.
As I cruising on the subway yesterday, I came across Mr. Money Mustache’s fabulous post about how to invest in an overvalued market. He just sold his house and had an excess of cash that he wanted to put to use so had some big decisions to make. You really should check out his entire article, but basically he thinks similarly to me: that he doesn’t care about the stock price because he doesn’t anticipate selling the stocks for a really long time and he just wants to collect the dividends. Historically, over the long-term stock prices have always gone up so even if there is a short-term correction, it actually doesn’t matter that much.