Is there a "perfect time" to invest in the market?
Attempting to time the market has been proven to be a foolish idea time and time again. It could even cost you a lot of money. When it comes to investing, a long-term, diversified strategy is far more likely to result in positive returns than chasing short term gains.
Given ongoing global economic uncertainties, the rise in the cost of living and recent stock market volatility, many individuals are wondering if now is a good time to invest. The short answer is yes. The wisest plan is to invest and take a long-term view, rather than worrying about what is going on in the markets today. If you have capital available to invest, then trying to time the market is the worst strategy you can employ.
Risks of Trying to Time the Market
Predicting the peaks and troughs of the market is impossible. Markets can move in either direction unexpectedly and very quickly, this is often the result of an external event that triggers mass buying or selling of assets, a recent example being the outbreak of conflict in Ukraine. Those waiting for the bottom of the market will find that inevitably, this is only known after the event.
Rather than trying to time the market, you should consider whether investing is right for you. Attempting to time buying and selling frequently results in in higher costs of trading.
To be successful, an investor would need to foresee both the best time to buy and the best time to sell. This simply isn’t possible and even the most experienced investors don’t get this correct.
While staying invested during market fluctuations may be unsettling, having discipline usually yields greater long-term results than pursuing short-term
The Importance of Diversification
Diversification is about managing risk through investing in a range of different assets around the world – assets most commonly used are cash, shares (equities) bonds and property. A well diversified portfolio will provide access to different geographical regions and sectors of the market. Any portfolio should reflect your attitude to investment risk and meet your long term goals.
A truly Independent Financial Adviser can help you to construct a portfolio tailored to your specific situation and will provide an ongoing review service to ensure that your portfolio performs well over time and remains suitable.
Establishing a Suitable Portfolio
When it comes to investing, it’s critical to consider your situation, income requirements, goals, and time horizon, as well as your tolerance to risk. It is best to work with a fully Independent and well qualified adviser who can construct a diversified portfolio with the appropriate risk and return characteristics to provide you with peace of mind.
Regardless of current economic conditions, a long-term, diversified investment strategy is essential for safe guarding and growing your portfolio. Your adviser should review your investment portfolio regularly with you, to ensure its ongoing suitability.
Your arrangements for your life abroad should be structured as tax-efficiently as possible. To ensure you are making the most of the tax efficient options available, speak with an Independent Financial Adviser that is well-versed in cross border Financial Planning.