- As far as the market is concerned, a perfect time to invest does not exist. While you could do well by buying low and selling high, you will never know when the market is at its absolute lowest point. If the market has fallen, you may have a hard time getting up the courage to invest anyway. Instead of looking only at the market, you have to look at your own personal money situation. Do not invest money that you need to make your living exepenses. Beyond that, you should consider investing any extra money that you have.
- Instead of worrying about when to time the market, setting up a regular investment plan might make more sense. When you invest a regular amount that you can afford into the stock market, it keeps you from putting too much in at once. You can buy more shares when prices are low and fewer shares when prices are high. This is known as dollar-cost averaging and it provides you with the ability to build your portfolio over the long-term.
- Instead of looking at the best time to get into the market, consider how long you can do without the money. If you need the money right away, it might not be the best time to invest. If you need the money within a short period of time, some investments are better than others. For instance, you might put your money into a CD or a short-term bond. If you can do without your money for the long-term, putting it into the stock market or into a retirement account might make sense.
- Many investors have made large returns by using a strategy known as contrarian investing. With this type of investing, you take advantage of market sentiment. For example, when the market is down, the majority of investors tend to overstate how bad things are. This drives stock prices down even farther than what they should be. When this happens, you can buy stocks at low prices and then make a large return on your investment when the prices bounce back. If you follow this strategy, the right time to invest would be when the market has just gone down significantly.
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