The age old question. When should I start investing? Is the market over-inflated? Should I wait for another dip? Well that time may never come. The market normally goes up and no one can predict when a downturn will happen. If you wait until the market crashes, you may lose out on the gains that already happened. That's why today is the best day to get started.
Why you should start investing today!
Why not today? Get an app like Acorns or use Vanguard and put it on automatic deductions. Now you don't have to think about it and you'll start dollar cost averaging your way into the market. Using this method you don't try to time the market, and instead make regular payments which will average out over time. Dollar cost averaging allows you to consistently invest without much effort. It's also important to stick to this method even in an economic downturn and is actually beneficial because it will lower the average cost of your investments.
Waiting just hurts you in the long run
Waiting makes you miss out on unrealized gains. Even if you the market dips, you come out on top. The market could grow an extra 50% by the time it drops by 10%, which would make you miss out on 35% of the returns. Again, you can't predict when the market fall will happen. Dollar cost averaging is another way to protect against this risk, as you will buy when the market is low anyways.
If there is a dip, stick to your plan and don't panic. The market SHOULD recover. The market has never had a 10-year period where it was lower before the 10-years than it was after.
But what do I invest in?
The easiest thing is to just put your money in a fund and forget about it. Vanguard has a ton of funds that you can pick with low rates. Just choose which one is best for your risk tolerance and diversifies your portfolio.
If you're feeling daring, you can buy individual stocks using an App like Robinhood or opening up an account with Fidelity (both of which have no commissions). Just know that this can be riskier and comes with a higher chance of losing your money.
Factor your investments into your budget and stay consistent. Investing now is a great way to earn a long-term income stream. If you put in money now, it will more than double in 8 years if you assume an 8.5% growth rate.
*The information contained above is not intended as, and shall not be understood or construed as, financial advice. I am not an attorney, accountant or financial advisor, nor am I holding myself out to be, and the information contained on this Website is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.
