4 Post No:When Should You Buy Into The Stock Market?

I’ve got this former co-worker who absolutely refuses to buy into the stock market. He says it’s like playing the lottery or gambling. And no matter what kind of justifications I make, he won’t listen — instead, he’s content with putting his money into real estate property in his native country. His investments have yielded him significant returns in recent years, so it may be hard to argue with him about it.

However, this just emphasizes yet one more truism about investing:

Invest in what you know best and what you’re most comfortable with.

Though many of us don’t necessarily begin our investing lives as experts on things we’ve invested in, the point here is that we do enough due diligence on matters that put our money at some risk.

Thus, if you’re open to the idea of investing in the stock market (like most people actually are ) but are somehow still on the fence about it, maybe some of the following thoughts will help you take the dip into a few investments that should grow at a greater pace than your staid FDIC insured savings account, over the long term.

The Best Time To Get Into The Stock Market?

A lot of people I know ask me about when they should start investing in the market. My quick answer to them is “Buy now!”, but that really deserves a bit more explanation. Here’s what I really mean: when somebody asks me “When should I buy into equities?” I ask them to zero in on these 8 indicators that could tell them they’re ready to wade into stocks:

When you’re comfortable about it.

Don’t jump into the market unless you’re really comfortable with the inherent risk it offers. Because of the relatively higher returns that stocks give you, the risk to your capital is also greater. Of course, there is other risk involved if you do NOT invest in the market, like the risk that your money won’t be keeping up with inflation. By diversifying your portfolio and maintaining a long term investment horizon, you’ll manage your risk of capital loss much better.

Like, yesterday!

Most personal finance buffs will tell you that you should invest early or as soon as possible. I’ll take it further and say you should have started investing yesterday — and it’s obvious why. A while back, the stock market was a lot lower than it is now. Not in the near term of course, but look far enough in the past and you’ll see how it’s climbed. If you had invested yesterday, you’d be sitting on some profits. This is the case even as the market has dipped so many times over the years: the market’s long term trend is still UP.