Why carpe diem beats carpe tomorrow

Time and money – when is the best time to invest in the stock market?

All of my missions as set out in my book, 10 Things Everyone Needs to Know About Money, and elsewhere in blog posts, is to persuade people to put some of their savings into long-term stock market investments. Then people ask me: When should I do this? They might say: Do you think next month or after the summer or the beginning of the year or the beginning of the tax year…

I can’t answer that with any degree of certainty about what exactly the markets will be doing at those times. Nobody can answer that with anything other than an opinion that can be on the spectrum from pure guesswork to well inform. It remains an opinion. Not fact.

In the absence of fact, the best we can say is sooner is better than later. In principle, today is better than tomorrow. Yes the markets might dip tomorrow and it might have been a better buying opportunity. Yes the markets might still be down in a year’s time, but, history suggests (see my earlier post on your great great grandmother) they will not be down in 10 years’ time. Plus, in the meantime, you would have been receiving dividends which if you reinvest will compound nicely.

Many people are put off by trying to time the perfect investment. This is where perfection is the enemy of achievement. Where good enough beats perfect. Lessons in psychology teach us that the quest for perfection is paralyzing. The old investors’ axiom says it best: “time in the market beats timing the market.”

Carpe diem, my friends.

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