IS IT A GOOD TIME TO INVEST IN THE FINANCIAL MARKETS?
Côme Doléac
Associate Partner at Select Investors | Build and Protect Wealth | Financial Planning | Retirement Planning | Wealth & Tax | HNW Clients
Those last days, my clients ask me this question almost every day. The answer that I give all of them is the following:
YOU NEED TO INVEST
Investing in the stock markets is one of the most reliable way to create wealth over long term. You need to invest. As an example, if you had invested USD 10,000 in the S&P 500 index 50 years ago, it would be worth approximately USD 1,200,000 today.
TIME IN, NOT TIMING IS THE KEY TO INVESTING
With that in mind, there is quite a bit you should know before you dive in. Here is a step-by-step guide to investing money in the stock market to help ensure you're doing it the right way. It’s only natural to be concerned about short-term fluctuations in stock markets. The only certainty is that it is impossible to be sure how the markets will move.
The sharpest falls and the largest gains are often concentrated into short periods of time. If you try to time the market to avoid the falls, you’re highly likely to miss the gains.
The chart below shows how damaging missing a small number of the best days would have been if you’d invested in the Global stockmarket over the last 20 years.
WHAT TO REMEMBER
If you are thinking to invest, and you are asking the question, you can be 95% sure that the answer is “YES”. As mentioned before "time in" is more important than timing. Sooner you start better you have chance to gain those “best days”. Have patience with your investments and give them time to bear fruit.
TAKE AWAY - CHECKLIST
- Determine your investing approach: What are you financial goals? What’s your time horizon?
- Invest for the long term not for the short term
- Be comfortable with the money you are investing and keep a cash cushion
- Understand your risk profile, and take risk accordingly
- Diversify your portfolio
- Control your emotions
Global Account Director
4yVery interesting post. Thanks Côme Doleac for this good reminder that we are also using to manage business plan and keep in mind our target...
Réception & Administration – Coach Métier à l'Hôtel Union
4yGreat tips and reminders to keep in mind, especially during crisis time !! thanks Côme Doleac
Innovating Change through Education and AI Solutions | Salesforce Enablement and Training | Certified GPT Expert | 5x Salesforce Certified | ADHD Superhero
4yThank you for the reminder. It is hard at times to keep in mind the timing bit. Yet with that in mind the other tips are easier to follow.
Consultant, Writer, Publisher & Entrepreneur: I help people increase their abilities and improve their outcomes
4yThanks for the post! Timing, as they say is everything; and it's also important to be mindful of how the passage of time affects not only our portfolio but our management strategy. So yesterday we had a longer-term horizon, whereas today, it's shorter, and so it's important to be mindful of staying on track and reevaluating on an annual basis. It's okay, and advisable to put it on cruise control for non-day traders, but don't forget it five years later and expect the same strategy will prevail; it may, but important to reassess and revise when necessary. Cheers. : )
LLM | CTA | ADIT | Associate Director at Deloitte
4yVery good article Come !