Wednesday, January 29, 2020

When is it a Good Time to Invest?



Just a short post on my random thoughts on this subject. I didn't have much money to save, invest and buy a house until I was well into my fourties. A failed first marriage, child support payments and constant job movement took care of most of my disposable income.

I used to joke that in the 80's I lived not paycheque to paycheque but income tax return to income tax return. In those days one could claim child support payments as an expense to offset income gains.

I was pretty much a financial misfit in those days. You can solve a lot of problems with time and money. Just those two things. You have to be patient.

My basic mantra to answer the above question is really quite simple.



Invest when you have the money, sell assets only when you need the money and in the middle do nothing.


It's a crazy environment out there right now as markets are high and stock valuations on some companies are at nosebleed levels.

What to Do?

The questions are many but markets always turn around and move higher like 70% of the time. If you can't stand to see your portfolio lose ground on paper then go buy a GIC from your bank and try and relax.

Turn off BNN and stop sweating the latest crisis happening world wide. Canadian markets were up 30% last year. It's not a big deal when we shed a percent or two like happened on Monday.

  1. If you have lots of time to retirement it's never a bad time to invest.
  2. Be cautious at all time highs.
  3. Never panic sell in a crisis.
  4. Buy index ETFs when starting out if you want general market exposure.
  5. Don't try and time the market. Hold if you don't need the money.
  6. Patience is critical.
  7. You are you're own worst enemy when it comes to investment returns.
  8. Anything happens and will happen in the short term.
  9. Start as early as you can.
  10. Stay invested and stick to your plan.
  11. Continue to buy when you have the money.
"I buy on the way down and never sell on the way up" - Barry Schwarz

You only lose money if you sell at a loss. Don't lose money.


Of course if you don't know how to manage taxes go see a professional on where to best manage your accounts, TFSAs, RRSPs and open investment accounts and or RESPs.

In Sum

It's always a good time to invest if you have a long runway of time and have the money saved to invest.

The world has always been an uncertain place with one crisis and bubble after another. The tech bubble of the late 90's (I lived it) saw fortunes made and fortunes disappear. Lots of companies that weren't profitable traded at ridiculous multiples with no earnings. Reminds me of a lot of pot companies right now.

That is not investing, it's pure gambling. Do it if you want but know the difference.

I also believe you should become a DIY investor. Learn how to manage and invest your own money. By all means if you don't want to then seek a professional's advice. Just me.

Buy individual stocks only if you know what you're buying. Do your homework and understand the business.

I buy companies that I use, subscribe to or make payments to.

Companies like Costco, Apple, Bell, Bank of Nova Scotia, Canadian Utilities and Enbridge.
  
I shop at Costco, use internet and consume data, use an iphone, use BNS as my bank, pay a utility bill and use natural gas for heating and cooling.

Not everything but a good starting point. This is not a recommendation for you to do the same but only highlighting what I do and where and when I invest.

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2 comments:

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    1. Thanks Henry, I really appreciate you stopping by and leaving a comment.

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