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Is now a good time to invest?

Is now a good time to invest?

July 02, 2022

If only we had a crystal ball that worked.  But we don't.  In the financial services industry, we use a term called dollar-cost averaging to help take away some of the fear that we're investing at the wrong time - when prices are high.  It might sound like a fancy term, but it simply means investing on a regular basis.  If you've ever participated in an employer's retirement plan in which your contributions are automatically made for you when you're paid, you've already used this strategy.  You just didn't know it.  Your financial advisor might also suggest this strategy for your brokerage or managed account.  It's rather simple.  We first decide how much we ultimately want to invest.  Next, we decide on the time period - maybe 3 months, 6 months, or a year.  Lastly, we divide the amount we plan to invest by the number of periods to come up with the periodic investment amount.  If the market goes up, you've invested a portion at the lower prices.  Alternatively, if the market goes down, you didn't invest it all at the higher price.

This is certainly a strategy to consider when we're experiencing volatility as we have recently.