Is now the best time to invest?

Is now the best time to invest?

March 21, 2024

It's been our experience that people ask this question whether the market has been going up or going down. Everyone it seems is concerned about getting their timing right, or more commonly, adjusting their portfolio when the market has been going down over a period of time. The answer to this question is like the old story about when is the best time to plant a tree? The best time (with trees and investing) is twenty years ago, but the next best time is now. 

The accompanying interesting chart from J.P. Morgan illustrates the impact over 20 years of making a decision to get out of the market for short periods of time over the past 20 years. The chart shows that the 20 year annualized return for a $10,000 investment in the S&P500 from 2004 through the end of 2023 would have been 9.7% for someone who remained fully invested. But if an investor missed the 10 best days by being out of the market, their return over the same period would have been 5.5%. As you will see from the chart, missing more of the best days results in lower or even negative returns. 

As the chart indicates, "Seven of the 10 best days occurred within two weeks of the 10 worst days!" We've been advising folks for more than 25 years and those that have asked to get out or partially out of the market after one of these "worst days" are never ready to reinvest within 2 weeks, so they miss the recovery and permanently impact their returns. 

We suggest that investors follow the advice on the chart: Plan to stay invested. Always invest for the long term. You will be much more successful!

Of course, the future is not a repeat of the past and this chart is not intended to recommend any investment or investment activity.

Thank you very much for your continued confidence in our service and advice. If you would like to discuss our opinions, outlook, or your portfolio in greater detail, we would be happy to schedule a meeting or a conference call at your convenience. Lastly, don’t keep us a secret. If you know someone who would like help planning for their financial future, we will be pleased to speak with them to see if we can assist.