Everyone will tell you growing up that they wished they had invested in stocks when "they were your age". This thinking has proven to be a good idea for well over the past 85 years (since Black Tuesday). Some people will tell you to keep investing now as the S&P 500, DOW, and NASDAQ are all on the rise and have been steadily rising since the end of the 2008 housing market crash. The only problem now is, this isn't real economic growth we are seeing in the market. This "growth" is the rich stashing all their money in blue chip stocks and other large corporations because it is the only place they can get a real return on it. With interest rates so close to 0% in almost all banks, bonds are at an all-time low, and the housing market just beginning to recover, people have no other place to keep their money than stocks. The stock market bubble that we are seeing right now is one of the worst that has ever occurred since 1987 . People are going to quickly start to pull their money out of stocks and put it back into safe havens as soon as interest rates are raised (get on that Janet Yellen). Americans can expect at least one, maybe two, interest rate hikes by the end of this year and even if these interest rate increases are small (25 basis points for example) it shows investors and the wealthy that the Fed thinks the economy is going to finally reach pre-2008 levels.
As soon as people see confidence in the market growing, it will cause a mass hysteria and people investing in bonds and other commodities that have guaranteed returns. Getting back my original point, the time to invest is not now. I'm not saying hold off completely, investing a small portion of your weekly income is a good habit to get into, I am saying do not invest thousands of your dollars in the market within the coming months. The reason is that many economists have predicted a 50% drop in the S&P 500 meaning if you put in that $10,000.00 today to purchase 1000 shares, your money would be cut in half meaning you have 1000 shares, but they're now worth $50.00 each instead of $100.00 each. Whereas if you wait until AFTER the market drops, you can now buy 2000 shares for that same $10,000.000 and then when the market recovers (which it always does) you will have twice the return on your money in the same time. The stock market is not a place to make fast money, it is a place to stick money that you don't touch for at least 5 years so that your money can grow effortlessly.
Getting back my original point, the time to invest is not now. I'm not saying hold off completely, investing a small portion of your weekly income is a good habit to get into, I am saying do not invest thousands of your dollars in the market within the coming months. The reason is that many economists have predicted a 50 percent drop in the S&P 500 meaning if you put in that $10,000.00 today to purchase 1000 shares, your money would be cut in half meaning you have 1000 shares, but they're now worth $50.00 each instead of $100.00 each. Whereas if you wait until after the market drops, you can now buy 2000 shares for that same $10,000.000 and then when the market recovers (which it always does) you will have twice the return on your money in the same time. The stock market is not a place to make fast money, it is a place to stick money that you don't touch for at least 5 years so that your money can grow effortlessly.
In conclusion, waiting for the market to dip before investing is always the better idea in any situation. Do not buy high and hope for higher, buy low and you will always sell higher. It may be scary to see your investments go negative, but they always go up. Do not panic in bear markets, watch them loosely, day to day fluctuations mean nothing, but watch quarterly and adjust your portfolio accordingly.
