There Is No Perfect Time To Invest

There is no perfect time to invest…

Unfortunately for investors in actively managed mutual funds and some actively managed target date funds, market timing is a reactionary investment strategy involving making buy or sell decisions based on predictions about future price movements, over and over.

We see patterns where there are really none… This is akin to being a conspiracy theorist.

Conspiracy theorists are afraid of something they don’t understand.

Unfortunately, if you are afraid to invest in something because you believe the time is not right, I’ve got news for you…

The fear of investing never goes away…

You can’t time the market.

A healthier approach for investing is to set up an automated schedule for regular investments.

You can do this with dollar cost averaging systems offered by fintech firms, such as Acorns and WealthFront. Your bank may offer the same service.

Dollar cost averaging means buying a certain amount of a stock or fund (preferably a low fee, non-managed index fund) each week/month/year over time no matter what.

This has the benefit of taking the emotion out of the process.

Also, dollar cost averaging can compound on itself if you like dividend stocks. By investing in dividend stocks or funds, and setting them to reinvest, your dollar cost averaging discipline does double the work for you.

At some point you need to make a decision.

Follow the Warren Buffett approach… Or check the Berkshire Hathaway Portfolio Tracker every quarter and simply buy what he buys.

Warren Buffett doesn’t time the market… He is a buy and hold investor who believes in buying stocks he would own 50 years from now.

Make a decision and start.

After all, the price of inaction is higher than the cost of making a mistake.