subject: The Idea Is To Buy Low And Sell High When Investing [print this page] You probably have heard the old adage -"there are no dumb questions, only dumb answers." The question "When is the best time to invest?" is no exception when you are invested in the stock market.
Based on dollar cost averaging (discussed in a future article) - buy small amounts regularly. I will not go through the math now, but the principle is quite straightforward - and yes, it works in other currencies too. When you buy regularly, you will buy a larger number of shares when the price is low, and fewer when the price is high, giving you better gains than buying at an average price. And you will have far better gains than buying at the highest price.
Deciding to borrow or withdraw from your retirement fund is not a fine idea either. Your retirement fund is a long-term endeavor. Retirement planning - and financial planning as well - would normally inform your saving toward that goal. You should not compromise a long-term goal like retirement with short-term needs if you can avoid it. Even if you borrow with the intention of repaying, this often does not happen - particularly if you do not properly plan your finances.
Income protection safeguards your retirement fund in two ways: it allows you to continue saving or at least prevents you from unnecessarily depleting your retirement savings. Being unable to work can have a crippling effect on your contributions. Those without insurance are tempted to withdraw from their retirement plans, even if they incur penalties. Income protection safeguards against employment interruptions, which can lead to retirement fund depletion.
Your goals will be determined by your needs; this will be done whether it is by you or your financial advisor. You will need to factor in current income, living expenses, debt, bills, lifestyle, and what goals and dreams you have for your lifestyle after retirement. You will need a certain amount of savings and investments to realize your retirement needs and wants. There should also be a cushion in cases of emergency, illness, death, or any unforeseen circumstances. There is no better time than the present to begin saving for the future. It is necessary to prepare for that and more. You can also factor in what you will be receiving from social security benefits; however, this should be the amount with the least importance. It is rarely enough to live on, and it should be used as part of the extra and cushion factor.
The big lesson from all this? Stop telling yourself that you do not have money to save or invest now, and you will invest a large amount in the future when you are earning more. That is like getting some shade from a tree you plant ten years from now. The Power of Compounding is why I am glad I started investing 35 years ago. When Sir John Templeton was asked this same question many years ago, I recall when he paused and reflected (as he often did) and answered "when you have money." So, whether you decide to wait for a lower price level, invest regularly, start immediately (20 years ago would be better), or wait until you have more money - Happy Investing, and you will be glad you did!
by: Arthur Jones..
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