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Created on 21.03.2018 | Updated on 26.01.2021

The best time to invest your money is now

Anyone who places their money in a savings account is missing out on long-term opportunities for returns on the financial markets. It can therefore be worthwhile to invest some saved assets in securities such as stocks, funds and similar. But when is the best time to switch from saving to investing? Is there actually a “right” time to invest your money? One thing is clear: waiting too long does not generally pay off for investors.

Chasing the perfect time isn’t worthwhile

With hindsight, it always seems easy to say: “If only I’d invested my money in shares in company X then, I would have generated a good return   and increased my assets considerably by now.” This type of thing is often heard. However, even for experts, it is difficult, if not impossible, to determine the “right” time in advance. Major price gains usually occur on a few specific days and cannot be predicted in most cases. Determining the “right” day on which to make a particular financial investment is therefore virtually impossible or pure chance.. It is much more important for investors to be clear about their investment goals and investor profile  and to stick to their strategy long-term.

 

 

Profits come to those who remain disciplined and invest over the long-term

In most cases, a long-term investment horizon will result in profits: The historic development of global stock markets shows that average returns from an investment horizon of 10 years are always positive. This is because, over a longer period of time, even large price drops on the stock market can be compensated again. This means it is all the more important not to be led by your emotions when deciding whether to sell all your investments at an unfavourable time. If you fail to stick to a long-term investment strategy, lose your nerve and sell your shares when the price falls, you can expect to suffer losses. It definitely pays to keep a cool head. 

Invest long-term to benefit from the cost averaging effect

Staggering your investments rather than investing them all in one go can be the best approach. If you wish to invest long-term, you can break your money down into tranches and invest a certain amount on a monthly, quarterly or annual basis, for example. In this way, you can compensate for price fluctuations even more effectively and you benefit from the cost averaging effect. Even if you don’t want to invest with a fixed plan but instead wish to retain the greatest possible flexibility and invest precisely when you want to, you should heed the rule that “waiting too long is generally not worthwhile for investors”. The sooner you start investing, the longer you can benefit from potential interest , dividends   and returns.

 

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