How to Know When to Invest: Getting the Timing Right

by Andrew McGuinness     Jul 16, 2019

Investing in the market is not easy, but you can make it easier on yourself if you learn all of the best tips and tricks. Not only do you have to do research on the market, the market’s influences and the different stocks filling the market, but you have to do research on when to invest as well. In order to really make the most of your money, it is required that you get the timing just right. To do so, here are four ways to know when exactly to invest.

1. Take advantage of every second

Rather than taking so much time to consider the benefits and disadvantages you may encounter upon making an investment, and wondering whether you have enough funds to invest, you need to take action.

Every second spent considering investing rather than actually investing is a second wasted. What your time should instead be spent on is the planning out of an investment. Rather than asking yourself whether or not to invest, the questions you should be asking are what do I invest in, when do I invest in it, for how long, and for what reason?

2. Consider the length of your investment: short or long term?

Obviously, the more time you have available to you to collect funds for an investment, the more money you will have and the more risks you will be able to take. The more risks you are capable of affording, the more your investment options and the timing of when to invest in them are going to change.

If you are pursuing a short-term investment, risks are not ideal and funds will most likely not be added on after your first investment. This means you need to move in quick, when stocks are as low as possible, in order to gain high returns fast. Otherwise, there is no point in making a short-term investing at all.

With long-term investments you may take the plunge at any time, allow for risks, make way for instability, and just be more dangerous in general, simply because there’s more time to risk, lose, regain stability, and eventually earn a higher return than you would with short-term investing.

For funds you would like to access within five years, individual bonds, money market funds, saving accounts, and certificates of deposit are your friends. This is because they all not only guarantee the return of what you put in, but they are sure to grow (though to a rather minimal extent) as well. For long-term investors, real estate investment trusts, stock-centric mutual funds, and bond mutual funds are recommended.

3. Selling your stocks

If you are able to time the market properly, like some investors have learned to do, the best time to sell is right when the market is on the verge of dropping. Buying is then of course done during a stock’s low, right before it is assumed to rise. Predicting these patterns and the moment right before the market causes your stock to rise or fall is no easy task. If it were easy, everyone would be an investor or trader.

However, sometimes you can easily tell that economic influences are going to have a negative effect on your investments when companies begin to show signs of financial instability and weakness. This is when you should sell your investments and place them elsewhere.

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