Investing can seem like a game of jump rope at times. You may think that there’s a specific time to get into investing, a specific time to get out, and a time when if you do try to get in that could cause everything to crash down around you.
This month in Hespeler Village Magazine David Reeve is helping you find the right time to get into investing. Hint: it’s not as complicated as it seems!
When is the Best Time to Invest?
We are often asked, “When is the best time to invest?” Closely followed by, “I’m worried about the markets; can I get out now, and go back in when it gets better?”
There is an old saying, “the best time to invest was 20 years ago, and the second best time to invest is today.” In other words, if you look back in the time, the market has done well and will likely continue to do well. However, if you haven’t invested, then who cares what it did. If you have cash, invest now!
The following chart shows the growth of $100 over time, since 1970 to be precise. Over that period of time, the growth of that original $100 is a spectacular 1910%. However, if you missed just the best 25 days over that period of time, your return would only be 371%.
When the market drops, (remember 2008?), people tend to make the wrong decisions. In short, we act emotionally rather than rationally. In 2008 after the drop, many people invested in GICs fearing further losses. However, had they stayed fully invested in a proper portfolio, the returns would have been spectacular.
My advice this month is don’t try this yourself. Investing should not be a DIY project.
Hire a professional who can help you determine your goals, create a plan to get you there and help manage your portfolio.
David Reeve is president of Davlyn Financial Services Inc., an award winning, family owned and operated financial planning firm in Hespeler. He can be reached at firstname.lastname@example.org.