You'll Finish Down If You Wait for Up Market to Invest
NEW YORK ( AdviceIQ) -- One of the most common questions I get: Should I wait until the market goes up before I make another contribution to my investment account?
The answer is no. You should be investing continuously, in fair weather and foul. Ongoing contributions to your 401(k), individual retirement account or other investment vehicle give you the best results over time.
Since April, the market has generally headed up, following a two-month slump. Given the unending turmoil in Europe, slowing growth in China, high unemployment in the U.S. and other troubles, it likely will slip again before too long.
No one, other than the very lucky, can time the market successfully. Trying to invest that way ignores a truth about markets: They go up, and they go down.In the grand scheme of things -- and some research that bears this out -- investing when you have the money provides a greater return historically than waiting until the market is up. So don't delay. No matter how many times you hear the thought, the truth of it shines through: Past returns are irrelevant, as they don't guarantee future results. Buying low sounds good, but feels scary, because that's the moment the news is the most worrisome. Indeed, at times panic fills the air. It feels as if there is less risk when things are going up. But that is when the risk is rising. The value of your most recent investment is more likely to go down after a prolonged uptrend. But investments made over the long term are likely to grow, despite periodic downdrafts. See my blog post
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