Should I wait to invest?

Hot or Not?: A common question that we get asked is: “The markets are running very high. Should I wait to invest?”. The answer, surprisingly, is “No, the best time to invest is Now!”. History reveals that investing in the markets at highs has actually produced greater returns than getting in at a different time. Research from JP Morgan has shown that investing in the S&P 500 on any day since the start of 1988 produced an average one-year return of 11.7% while getting in on the days that the index reached an all-time high produced an average return of 14.6%! The numbers for 3 year and year time periods also show higher returns.

In general, the best day to invest is today. For long-term investors, it is important to stay in the markets and not try to time them by getting in and out. Over time, a buy and hold strategy produces superior results over waiting to catch market tops or bottoms, which is impossible to do. It can also be counterproductive as you could lose out on bull runs with upside potential. Keeping a good portion of your portfolio in the stock markets and adding to it as you go along, should provide higher returns. It will also produce better risk reduction through averaging over different marketing cycles.

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