Should I start investing now or when the markets drop?

Today's topic is should we just get started in investing now or wait for the stock market to drop again before getting in?

Many at times, when we want to start investing, we always wonder should I buy in now or wait? Historically, the markets have always trended upwards and so if you are in for the long term, it does not really matter when you put your money in as it will in the long term trend up. Many of my friends got interested in investing when the pandemic caused the drop in the stock market. I would guess that prices at that time was really attractive compared to today, when a vaccine has been announced and prices are slowly going up again.

How can we actually know the best time to invest? The answer is no one knows, you could be lucky once or twice but you will will not be able to get the lowest point every time and what if a bull market lasts for 10 years, will you be holding your cash for 10 years?

Just like in my previous video where I talked about DCA and LSI, if you like a lower risk, you can consider DCA to ensure your funds are spread out over a period of time.

Time in Market > Timing the Market

I am sure you have heard of this phrase, time in market BEATS timing the market. This is true in the long run because

1. Dividends (if any) will add up over time.
2. Allow compounding to take effect by earning returns on those returns over time. The longer you let your money ride out the ups and downs of the market, the more likely you are to have a positive outcome.
3. The stock market is a volatile place — but over time, it tends to trend upward and provide positive returns

Why we feel scared to invest our money

• Capital not guaranteed

Many are afraid of starting to invest right away because they feel that it is not capital guaranteed and they will lose all their capital. This is definitely true and that's why we dont put all our money into the stock market.

• Fear of losing money due to volatility

What if I put my money into the stock market now and it drops? This is what most people who are afraid to starting to invest immediately feels. I have to admit that when I first started investing, I was worried as well and checked my investment frequently. But you need to know and educate yourself why you have invested in that certain stock/ETF and that in the long term, it will reward you as you have done your research or checks. Even if it doesn't, at least you have learned something. If the volatility affects you, it is then better to maybe stick to less risk vehicles for your money which will usually mean a lower growth.

You have to make sure that you are comfortable with what you are investing in, if you want to invest in something more risker, set a side a small sum of money and be prepared to have a huge fluctuations. Having a mindset that fluctuations will occur over the short term can help but if you see any fundamental change or feel that the company has changed from what it is, do reconsider and think if you would like to continue to be invested in it.

• Not sure what to invest in

This is definitely something that stops most people from starting to invest immediately. Many of my friends have ideas of investing their money because to them, they know that by investing, in the long term it is good and they currently have time on their side as they are young. Hearing so many options and with some what a limited budget, my friends really want to hear what to invest in but the thing is that they want something to invest in that will grow and be beneficial in a short time but investing requires sometimes a long time horizon. I cannot guarantee them that whatever I am saying will make them profit and that is why I usually don't tell my friends what to invest in because I am really scared of the consequences.

How we should make ourselves get invested right now

• Overcome that inertia

Taking that first step is always the most difficult. Definitely because there is so much things to invest in nowadays, we are more cautious of what to put our money in. So we first should know ourselves, what kind of risk appetite, can we take volatility, are we looking for high returns and if so what type of asset allocation are we looking at. By understanding yourself better, you will know what kind of investing style or how you like your money to be allocated.

You might have a change of investing strategy along the way but adjustment can be made and at least by then, you would have gathered more knowledge on investing. So don't hesitate, once you have the basics and extra money saved up, The bottom line = The best time to get started investing is right now.

Conclusion: In fact, the biggest investment mistake you can make is NOT getting started, since the simple act of saving money is the most powerful tool you have at your disposal. Thanks once again for staying till the end of the video and do like and subscribe to my channel!

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