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. 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.
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
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.
Worse case friends, consider limping in. What I mean by this is dollar-cost average your way in by putting a big of money in this month, then next month, and so on. But in doing that just remember you’re trying to time the market.
Say you’ve ear-marked $5,500 or $6,000 to invest (and max out) your Tax Free Savings Account (TFSA) this year. Invest $2,000 now, maybe $2,000 soon, and so on until you’re fully invested. Besides trying to time the market, just 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 be.
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.
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.
- Save early and save often.
- Diversify your investments.
- Stay invested.
- Keep your investing costs and transaction costs dirt-low.
- Be mindful of tax considerations.
Control what you can – your investing behaviour – so invest when you can.
Nobody knows when the next crash nor market rally will occur.
If you haven’t started your investment journey yet – now is the time.
You’ll never be younger again than today as Andrew Hallam puts it in his post.
The best time to invest is as soon as you have the money. You’ll be wealthier for it.
What have your experiences been – when do you invest? Are you struggling with your timing decisions?
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