For those who wanted to follow along, this will be the first execution of my refined, structured Market-Based Buying Strategy for 2026 for investing well with minimal effort: https://brighterdayslifecoaching.com/a-structured-market-based-buying-strategy-for-investing-well-with-minimal-effort/.
If you are a High Risk (HR) investor, this post is for you – investors of all other risk categories can wait and do nothing if you want. If you aren’t sure what your investment risk category is, you can find it here: https://brighterdayslifecoaching.com/investment-tools/
HR Investors: The S&P 500 index has dropped about 4.4% from its all-time high (a 3-5% drop in the S&P 500 index generally happens about three times a year on average) – so if it remains at its present level or drops a little more(~661 for the SPY ETF or ~6630 for the S&P 500 index would represent about a 5% drop), you might consider buying 33% or more (depending on your investment style and preference) of the cash you have available in your overall investment account into one of the major market index Exchange Traded Funds (ETFs) (or you can split that across multiple major market indexes if you prefer). I anticipate there will be a more substantial decline in the overall S&P 500 index, but I could be wrong – and the longer and the deeper the drop you wait for, the greater the likelihood you will miss the rebound. So, HR investors might want to prepare to go ahead and buy – other investors might be more inclined to take their chances by waiting for a deeper drop. It’s your financial future so do what you think is best for you.
I currently track eight major market index ETFs: S&P 500 index (e.g., SPY ETF), an equal-weighted version of the S&P 500 Index (e.g., RSP ETF), the Total Stock Market index (e.g., VTI ETF), the Vanguard Value Index Fund ETF Shares (VTV – value stocks of large companies), the Nasdaq (e.g., QQQ ETF), a Mid-Cap Stock Index ETF (e.g., IJH ETF), Russell 2000 index (e.g., IWM ETF), and the EFA ETF (or something similar). The first seven are major U.S. based indexes, while the last one tracks international stocks of developed countries outside the U.S. and Canada.
Of the above major market index ETFs, the most attractive ones right now appear to be: IWM, IJH, and EFA based on my analysis – they are all pretty close right now so you can pick either one of these ETFs or split your investment across these if that is your preference. None of these indexes/ETFs are without risk, however. For example, in a slowing economy, the IWM (or SPSM which is the one I like since it only includes the profitable small businesses contained in the Russell 2000 index) tends to outperform in lower inflation economic environments, lower interest rate economic environments, and when the economy is performing well overall. This index also tends to drop the fastest and deepest in a slowing economy but rebounds sharply in the midst of the economic slowdown in anticipation of economic recovery (the SPSM is even more attractive than the IWM right now based on my analyses). So, if you are very concerned about these kinds of issues, then you might want to choose a different index to buy into or split your investment across different indexes. The IJH ETF has not been historically quite as risky as the IWM in a slowing economy and can serve as an intermediary to balance the risks between the small-cap indexes (such as the Russell 2000) and large cap indexes (such as the S&P 500, the Total Stock Market, and the Nasdaq). The EFA (or IEFA which is the one I like since the fees are lower) can be impacted by U.S. trade policy and has potential currency exchange risk as well since this index is not U.S. based – it is also the one most affected by oil prices as they rise. I anticipate the rise in oil prices to be a short-term issue, however, but I could be wrong. In terms of the potential currency exchange risk, a falling dollar tends to increase gains while a rising dollar tends to reduce gains. However, the currency exchange impact is not typically very substantial unless the dollar experiences big moves when it comes to the EFA ETF. You can read about the risks associated with the major stock market indexes here: https://brighterdayslifecoaching.com/investment-tools/ (just scroll down to “UNIQUE DIFFERENCES IN STOCK MARKET INDEXES“).
Feel free to start buying in one or more of the aforementioned major market index ETFs if you are a HR investor and the S&P 500 remains close to where it closed today or drops a little more below that level. You can use the specific major market indexes above or use a different one that suits you. Just ensure the fees are at least as low as the ones identified above when buying. Some people like to split their investments across multiple indexes to help manage the risk so feel free to do the same.
You don’t have to be very precise when buying into the overall stock market – a gain is experienced 93% of the time over rolling 5-year periods and 100% of the time over rolling 10-year periods no matter when you buy. In sharp contrast, being a seller or waiting for drops to happen can be challenging in that you will be “wrong” 93% of the time over rolling 5-year periods and 100% of the time over rolling 10-year periods. So, you have to be very precise as a seller which is one reason higher risk investors should probably never (or rarely) sell. You can read more about this here: https://brighterdayslifecoaching.com/investment-tools/ (just scroll down to item 1 under “KEY HISTORICAL STOCK MARKET TRENDS”).
Here are a few historical trends which might be helpful to keep in mind: A 3-5% drop in the S&P 500 index generally happens about three times a year, a 10% drop generally happens about once every 1.5 years, and a 20%+ drop generally happens about twice every five years. So, the deeper the drop you wait for before buying, the higher the likelihood you’ll miss a significant rebound. You can read more about this here: https://brighterdayslifecoaching.com/investment-tools/ (just scroll down to item 2 under “KEY HISTORICAL STOCK MARKET TRENDS”).
You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing: https://brighterdayslifecoaching.com/published-books-and-life-coaching-services/.
Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities
I wish you much investing success for 2026 (and beyond!).
selfimprovement #selfhelp #selfdevelopment #success #finance #stocks #investing #stockmarket #bonds #bondmarket