Invest in Stocks Now or Wait 2025?
Despite the $S&P 500(.SPX)$ rising nearly 20% this year, these ups and downs can leave investors feeling exhausted. Other factors, like the presidential election and potential interest rate cuts by the Fed, could further impact the market.
So, given the market's volatility, is it safe to invest now? Or should we wait until the new year to see if things stabilize? The answer might be simpler than you think.
When is the best time to invest?
Even with all the fluctuations, there’s never really a bad time to invest in stocks. The market may be unstable in the short term, but if you invest in solid companies with strong fundamentals, your portfolio is likely to rebound and yield positive returns over the years.
The only way to lose money is to sell stocks after their prices have dropped below what you paid for them. As long as you hold on, even if prices fall, you haven’t truly lost anything until you sell. If prices eventually rise again, you won’t be at a loss.
Having a long-term outlook is key to weathering market volatility. Even if you invest during what seems like a bad time, if you stay in the market and don’t sell, your portfolio can still thrive.
For example, if you invested in an S&P 500 index fund in January 2022, your investment might have immediately lost value as the market entered a bear phase, but by today, your total return could be close to 20%.
In fact, data from Crestmont Research shows that holding an S&P 500 index fund for 20 years almost guarantees positive returns. Analysts found that this fund has historically ended every 20-year period with gains.
In other words, if you invest in an S&P 500 tracking fund at any time and hold it for 20 years, you’re likely to profit, no matter how the market behaves when you invest.
Why not wait to invest?
Long-term, there’s no bad time to invest—as long as you choose wisely and can keep your money in the market for the foreseeable future. These two factors are crucial, if you can’t meet them, it might be better to wait for a more opportune moment.
Doing your research is essential when deciding where to invest. If you’re picking individual stocks, you need to commit to understanding each company you want to own and keep an eye on them regularly.
Similarly, if you’re financially tight, investing might not be the best choice right now. It’s wise to have at least three to six months’ worth of savings in an emergency fund before you start investing.
While today’s market may seem daunting, waiting until 2025 to invest isn’t necessarily a safer option. Instead of worrying about when to buy, focus on acquiring quality stocks and holding them for the long haul.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
