Updated: October 19, 2023
This article is also a Reblog episode. Click play to listen to it instead:
Several years ago, just a few weeks after the national election, a friend said that it would be a good time to invest because the country has a new president and people are optimistic.
I agreed but also disagreed with him.
I said yes, it is a good time to invest now – but the reason is not really because of the new government.
He looked confused.
And then he asked, “What do you mean?”
“Well,” I answered. “It’s a good time to invest now simply because today is always better than tomorrow.”
Many people tend to think about investing when things look optimistic, when the economy is going strong or when there’s a lot of good news around.
If you think this way, then you’re missing a lot of opportunities because theoretically, the best time to buy investments is when things are down and stock prices are cheap.
So how do you know if it’s a good time to invest? How do you see where the market is going? How can you predict where the economy is heading?
The answer is you cannot unless you make it your “full-time job”.
And for several years, I tried to “time the market” – only to end up exhausted and in most accounts, disappointed.
And then I realized that the best time to invest is now, just NOW.
You’re never too young to invest, do it as early as you can.
Make your investment horizon long and increase your risk tolerance, so you can “ride the market” and survive the slumps.
Invest constantly and with discipline. Believe that no matter how the market is, there is an abundance of opportunities where you can invest.
So again, how do you know if it’s a good time to invest?
The answer is simple – it’s always a good time to invest.
The hard part is how to be smart about it and where should you invest. This is where your financial education becomes important.
Study the market. Study the economy. Study different types of investments. And you’ll surely discover good investment opportunities.
Are you afraid to invest? Then read this investing guide.
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Photo credit: Lyfetime
“….theoretically, the best time to buy investments is when things are down and stock prices are cheap.”
I agree. Last week I placed an additional investment in Banco de Oro’s UITF Equity Fund. The NAVPU went down sharply that time probably because of the uncertainty on how the first automated election will turn out. It was a good thing that the election was generally peaceful and orderly because this week, the NAVPU went up high again. The 10,000 pesos I invested gained P700++ in just one week. Imagine, if only I have one million pesos to invest, I would have earned 70,000++ in just one week!
You are right, start as early as you can just as Warren Buffet always says. It’s very important that you equip yourself with the necessary information about where you invest your money. Do not invest in something that you know little about. I have asked the same question if it’s a good time to invest because we have a new president and new government. But then again, today is always better than tomorrow when it comes to investing (and I mean starting early). That’s why most rich people are getting richer during the recession because they have the purchasing power and they use it well when they could get to buy stocks etc in fire shot prices.
That reminds me of a Chinese proverb: “The best time to plant a tree is twenty years ago. The second best time is now.”
[…] And of course, as in the case of the PSEi, if it’s going up, then it means the general economy of the country is doing good as well – which also means it might be a good time to invest (although I believe it’s always a good time to invest). […]
Hi again Fitz, I was right to think that the right time to invest is when the the stocks is cheap..
I remember one of your articles talking about “cost leveraging”. how does it work? For example I have an initial investment last month, then this month I wanted to add more, how is the Navpu computed in this case? Is the additional investment added to the old investment i have, or its a separate investment?
and the charts, thank you for that article. I have learned from it how important time is and why it is important to start on the down times and/or to start earlier.
The combination of when is the best time to invest are NOW plus when the market is down. Another option is the cost leveraging since market is not always down.
[…] Are you still waiting for the “right time” to invest? Here’s my suggestion to you: How Do You Know If It’s A Good Time To Invest? […]
[…] And of course, as in the case of the PSEi, if it’s going up, then it means the general economy of the country is doing good – which means it might be a good time to start investing (although I believe it’s always a good time to invest). […]
Well heck ya, there is always oppertunity IF you look for it. One of the very best times to invest is when there is blood in the street as the old saying goes. Apparently, Buffet knows this also when he says: ” Be greedy when others are fearful and be fearful when others are greedy.” What a buying oppertunity we have experienced in the first quarter of 2020 when the COVID-19 virus invaded!!! There may well be aftershocks in the economies of many countries for years to come? Still, if you missed the shorting oppertunity of a lifetime in February 2020, there has been a nice bounce to buy and profit from. As an option seller, I am loving the high volatility but going back to watching my boring dividend stocks and ETFs will also be cool. I will earn less but we will then able to go out to dinner with Bro & Sis in-laws and all our nephews and our niece.