The Right Time
Presented by Joseph Killgore , CFP ®
Investors ask me , “ When is the right time to invest ?” at least a few times every week . My short answer is always , “ There is no better time than the present .” Attempting to predict the future as if you have a crystal ball is not a wise investment strategy . Sure , anyone could be right once . However , it ’ s not realistic to believe that consistently tapping the tops and picking the bottoms of the market is sustainable . It is critical to create an investment strategy centered on your goals and objectives that tangibly defines when and where your assets should be deployed . By using this approach it takes emotion out of the equation and leaves reason and discipline as the guiding factors .
To see how waiting to invest can cost you , consider the fortunes of four hypothetical investors , based on data from the Schwab Center for Financial Research . Each received $ 2,000 at the beginning of every year for the 20 years through 2018 — but as you ’ ll see , each made drastically different decisions about how to invest those sums .
GREENVILE LIFE 18 SPRING 2022
Joseph Killgore , CFP ® Financial Consultant
Greenville Independent Branch
3110 I-30 Frontage Road ( 903 ) 355-2574 schwab . com / greenvilletx
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1 . The Perfect Timer . This highly skilled — or very lucky — investor was able to place his $ 2,000 into the S & P 500 every year at the lowest monthly closing price , thus ensuring the highest possible returns over time .
2 . The Immediate Investor . Each year , this investor kept it simple and invested her $ 2,000 in the market on the first day of each year .
3 . The Terrible Timer . This investor , prone to terribly bad luck , consistently “ bought high ” by investing her $ 2,000 each year at the market ’ s peak .
4 . The Hesitator . This investor ended up never investing at all . Instead , he left his money in cash investments ( using Treasury bills as a proxy ) every year . He always felt that lower stock prices — and , therefore , better opportunities to invest his money — were just around the corner .
The result ? Investing immediately pays off . While the Perfect Timer did best over the course of time , accumulating $ 175,859 over the 20-year period , the Immediate Investor who put her money to work early and steadily did almost