Is now a good time to invest?
Is now a good time to invest?
- November 3, 2020
- Posted by: Daniel McGregor
Apart from the age-old question about whether people should buy property or shares, ‘Is now a good time to invest?’ is the other classic question I hear.
The answer is pretty simple… the best time to invest is when you have the money.
Waiting for the right time to invest means bringing emotion into the equation. There is always a reason not to invest. Just think about all the things that happen around the world that cause economic or market downturns (or both) and how EVERY time they have been short-term anomalies before things move forward and hit record new highs.
So, when to invest is not really the question people need to answer. The better question is ‘Should I be investing?’
Most people want to jump straight to investing before they put in place the safety measures to do so. Just like everything done well in life, solid preparation pays off.
It’s not time to invest if you still have debt besides the mortgage, for example, credit card debt, personal loans, car loans, Afterpay debt, etc. These should be paid off before investing.
It’s not time to invest if you haven’t yet built up some rainy day money, preferably three months of living expenses. Once these savings are built up, it kills two birds with one stone – you can save money on a regular basis, which can then be invested, but also have money to fall back on so that investments don’t have to be raided and the strategy derailed should some money be needed for an unexpected expense.
Once you’re ready to invest, then it’s a matter of what strategy to employ… invest the money you have to invest all at once or stagger it out with regular investments over a period of time. Both have pros and cons and in many ways the choice comes down to how nervous you are about investing. If it scares you, it might be better to drip feed the money into investments.
Then the question becomes what to invest in. That is a conversation better left to have with you when you’re ready. In my experience, everyone has feelings about investments based on past experiences, upbringing, where they get their information from and the stories they hear. Each, all, or a combination of these, can lead to people being misinformed.
Come in and tell me about your situation and we can discuss how investments work, how to reduce risk, minimise fees and maximise returns. Investing is nowhere near as scary or difficult as it may appear. It gets complicated by false information and people selling products instead of sound investment strategies.
My business is fiercely independent and the ONLY people I get paid by are my clients. If that’s the sort of advice you think you’d like, give me a call on 0411 484 464 for a free initial appointment.
Cheers,
Daniel