When is the best time to Invest
If you are anything like me when I started to invest, the question that lingers your mind is “Am I buying stocks at the right time?”
I have learnt that timing the market is not a good strategy and all the best investors in the world make calculated guesses about the market. This, however, should not deter you from investing and if you are still reading this it’s clear that you are interested in learning more.
Here is a guide to help you to make that decision.
Do not waste time
The misguided notion that you need a lot of money to start investing is false. Do you have disposable income set aside? Or reallocate a portion from your already low-interest rate savings account? Various stocks and funds exist on the market to suit any budget.
The longer you spend contemplating whether it is the right time, the more you are missing out on the opportunity to benefit. Take for example Kingston Wharves [JSE: KW], I witnessed the stock trading at $45.85 on July 2, 2018, hesitant to purchase the stock at that price I gave it time. On October 10th, the stock last traded at $82.99, that is an 81% increase in stock price in 3 months!
Learn from my mistake!
The sooner you invest the greater the benefit in the long run.
Price Dips
A dip in the share price may indeed mean an ‘unrealized’ loss for your portfolio and as a new investor you may have some concern, but look at it this way, if your favourite clothing store had a sale of up to 50% off wouldn’t you capitalize on this discount?
The concept is the price of your securities will fluctuate occasionally, and that is sometimes your opportunity to buy at a lower price or discount and average down. A data scandal earlier this year resulted in the social media giant, Facebook’s [NASDAQ: FB] stock price to decline by over 17%, the stock price later recovered by nearly double.
That being said, it is that not all companies can recover from scandals. Conversely, it is important to research the company’s financials to assess whether it’s a good entry point or its time to exit. Be mindful of ‘media noise,’ which may be deliberately attempting to affect a share price.
Initial Public Offerings (IPOs)
“An initial public offering is when a private company or corporation raises investment capital by offering its stock to the public for the first time”- Investopedia.
A company’s initial entry to the market offers an opportunity to purchase stocks at a low price and benefit from significant capital appreciation. Before you do, take a look at the prospectus issued by companies and gain an understanding of their financial position, management, markets, and plans for the future to decide whether the IPO is worth your investment.
Investing is not for the faint of heart and only those who are in for the long-term will reap the most.
Start today, call us and commit to investing.
The perfect time to invest is now!
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