The best time to invest was yesterday

Experts are calling for oil prices to spike later this year.  Should I wait it out?

The Bank of Canada says interest rates are going to rise in 2017.  Should I wait out the year?

I read a report saying interest rates will significantly impact utility stocks and other interest-rate sensitive sectors.  Should I invest elsewhere?

No.  No.  No.

My experience has been – amongst professionals, amateurs, beginners and everyone in between (myself included) – nobody has a friggin’ clue what is going to happen tomorrow.  Let alone the day after.  Let alone next week.  Forget next month or beyond.  I called some predictions last year but I was horribly off on others.  Don’t kid yourself, the experts are too.  Billionaires lost billions making bets after the Trump election.

When it comes to investing the smartest people in the room will admit they have no clue.   You should admit the same thing.

“The best time to plant a tree was 20 years ago. The second best time is now.” – Chinese Proverb

Investing 101

I believe the same holds true for investing.

Critics of this post will say nobody wants to invest right before a major market correction or crash.  True enough – I don’t either!  The problem is nobody with any accuracy can predict when the next crash or correction will come.  This is why I believe the best time to invest money is now – when you have it.  Time in the market beats market timing.  I’ll point to an article from a Millionaire Teacher that says as much – he’s written books and he’s way more popular than I am…

Worse case friends, consider limping in.

By that I mean say you’ve ear-marked $5,500 to invest in your Tax Free Savings Account (TFSA) this year.  Invest $2,000 now, maybe $2,000 soon, and the remainder until you’re fully invested.  Be mindful of your transaction costs when investing though.  For what it’s worth, I try to keep my investing costs to around 0.5% or less (that’s a $10 fee for every $2,000 invested).

I believe the sooner you can get your money working for you, generally, the better.  Remember, money can make more money if you let it.

Last but not least, the sooner your money is invested, the sooner you can go back to more important things in your life like time with family and friends and causes that really matter.

The Summary

Even though short-term market volatility can be scary, I expect your long-term results will be the exact opposite.  Invest when you can, when you have the money, and remember the tenants of investing success when doing so.

  1. Save early and save often.
  2. Diversify your investments.
  3. Stay invested.
  4. Keep your investing costs and transaction costs dirt-low.
  5. Be mindful of tax considerations.

Control what you can – your investing behaviour – so invest when you can.  You’ll be wealthier for it.

What have your experiences been – when do you invest?  Are you struggling with your timing decisions?

Image courtesy of www.tradingacademy.com.

Mark Seed is the founder, editor and owner of My Own Advisor - one of Canada's leading personal finance and investing blogs. As my own financial advisor, I've grown our portfolio from $100,000 to well over $500,000. Our next big goal is to own a $1 million investment portfolio for an early retirement. Come follow my saving and investing journey by subscribing to my site.

17 Responses to "The best time to invest was yesterday"

  1. The worst thing to do is to time the market … There’s always something that will or will not happen. Invest when you can and don’t wait is the best thing to do. I’ve learned it … I’ve sold all my ETF since they where not moving and it looked that it could go down and a week later they gain around 10% instead of going down …

    Reply
    1. Good call. I’ve learned over time that time in the market is my friend – then I can get on with my life 🙂 Thanks for reading and sharing Financial Tech – appreciate the bloglove.

      Reply
  2. I do not invest in a stock when it is at its top and I’ve never been able to buy a stock when it is at its lowest. I do watch for down days, ex-dividend dates and quarterly/annual reports. Other than minor things like that I don’t try to time the market.

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  3. Amen! If I had one piece of advice to give to someone debating the best time to invest, or wondering if they are too late, I would tell them “ I don’t care how much, I don’t care if it is a stock, fund or ETF, I don’t care if it is Registered, Non-Registered or TFSA, ….JUST INVEST!!”

    I find it is like looking at photos of ourselves as we get older. At the moment the photo was taken, we perhaps thought we looked old, but 10 years later we look back at the photo and we realize we weren’t old back then at all. Same with investing. People may think it is too late to invest, but in 10 years if they stay with it, and invest in quality companies, they will (happily) come to realize how it wasn’t too late after all.

    Reply
  4. Investing regularly is a must. It instills habit, eliminates worry and has many other plus’s mentioned before which offset the negatives. But having said that, one must have an investment strategy which compliments those regular investments and can benefit from larger periodic contributions. For us, we maintained a list of stocks to select from when adding funds. In addition we also had buy levels. When we had larger amounts we looked at the criteria for those stocks and chose ones we thought would provide our best return. There were times we waited or just invested a portion, but we never tried to look beyond the list. When we did, and there were times, we regretted it later.

    Reply
    1. We too, have a list of stocks to select from when adding funds. I don’t re-balance my portfolio by selling anything.

      Running DRIPs helps ensure I continue to reinvest money and don’t spend it. Great forced investment plan.

      Thanks for your insight.

      Reply
  5. I purchase stocks as soon as I have $1,000 saved (that’s a 1% fee). I will top up whenever it makes sense and leveraging dollar cost averaging.

    I actually don’t mind a buy at 52-week high as it sometimes will make new high. I bought CNR when it was 52-week high 4 years ago and it’s one of my best performers.

    Reply
    1. Interesting. I buy when I have at least $1,000 to invest, preferably like I wrote, at least $2k to keep transaction costs to a minimum.

      I don’t mind buying near 52-week highs but I’ll do that for indexed funds – since with indexing – today’s price is always the best price. Otherwise, you’re into market timing and that rarely works.

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  6. Great comments! Interesting takes on investing styles. Seems everyone has their own little techniques and plays. The $1K threshold was not something I had thought about. I tend to throw any residual cash (stuff left over after pseudo-DRIPs and non-DRIPping) into one of the TD e-series once I get a hundred bucks. If I see a good stock that is on sale, I’ll sell some of that (ensuring I don’t invoke a sales fee) and buy an individual stock but I usually, at minimum, look at around $5K before I’ll pull a trigger. I also consider how much of a position a stock has in all the portfolios as well. Some of the Brookfield funds are diversified enough that I am comfortable with large positions but some of smaller ones I’ll try to keep at 5% or under. I’ve also on occasion put in some “stink bids” keeping an eye on ex-dividend dates. If I get ’em great, if not, there is always another day.

    Reply
    1. I also try to keep each individual stock holding under 5% of the total portfolio value. Less risk this way. That does not include some of my indexed funds where I hold upwards of 10% in each at this time.

      I like Brookfield assets. I could see BIP.UN and BEP.UN being huge winners long term. Just a hunch of course.

      Reply
  7. If you just keep executing your investing strategy (i.e. buy & hold, cost averaging), over the long term you’ll do just fine. Yesterday is always the best time to invest, today is the second best day. Don’t keep waiting!

    Reply
  8. I like to invest as much as possible up to a certain percent. I like to have X in free cash for when the market does correct. The percentage I use changes over time, but it has allowed me to buy a lot of great companies on the cheap for when the opportunity arises.

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  9. Finally someone that got it! 😉 Exactly what I think as well. I sometimes get frustrated reading other bloggers saying market is overvalued, a correction is coming, bla bla, so you should wait before investing. WHAT? Hold on a second, I need to breathe! 😉

    Seriously, with a strong investment strategy and good analysis of the stocks you buy, there is not one good reason to wait. You’re already missing some!

    I’m in love with this Chinese proverb. I can repeat it many many times. That and time in the market is more important than timing the market…

    Cheers!

    Mike

    Reply
    1. Same Mike….blah, blah overvalued, waiting for an entry – I mostly ignore that crap. I invest when I have about > $2k in accounts and go from there. When in doubt I invest in an indexed fund. KISS.

      Travel safe!

      Reply

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