With markets around the world continuing to prove unpredictable as momentous financial and political events continue to unfold, it’s perhaps not a surprise that investors are increasingly concerned about when the ‘best time’ for them to invest might be. Many of these people will decide to hold off on making an investment, choosing to keep their money out of the markets in order to see what happens.
This might seem sensible, but if you find yourself in this position it’s worth taking time to really consider your best option. The first thing to do is to remind yourself why you’re investing in the first place. Any investment should be made with the goal of achieving something you want, such as providing for your retirement; however, it’s important to remember that returns don’t run like clockwork.
Predicting short-term stock market movements is incredibly difficult, if not impossible. If it wasn’t, then every investor would be doing it and making their fortune easily. In order to counter any short-term shocks, one option is to make scheduled, monthly contributions to your investments if you’re using current income. This can position you over the long term whilst also helping to develop financial discipline. Those looking to invest a lump sum can also use this technique, splitting it into several tranches and investing over a longer period of time to reduce exposure to short-term risks.
