Don't wait to start investing, says financial planner: 'You'll always be glad you bought now'

"Given enough time in the market, we'll always do better. You'll always be glad you bought now."


Recent market volatility has some investing experts nervously eyeing stocks. This week, Ray Farris, South Asia chief investment officer at Credit Suisse, told CNBC's "Squawk Box Asia" that slowing economic growth would likely lead to a correction (a decline of 10% or more) in global stock prices. And CNBC's Jim Cramer pointed out that the VIX — a barometer for market volatility — was showing signs of "a pretty rough time in the stock market" ahead.

If you haven't started investing yet, or if you have some extra cash you're waiting to put in the market, you may be thinking it makes sense to wait a little longer. After all, the market has to turn downward at some point, and isn't the old investing adage "buy low, sell high"?

That may be, but for every second you spend waiting to get in the game, you sacrifice some of your greatest assets as an investor, says Evelyn Zohlen, a certified financial planner at Inspired Financial in Huntington Beach, California. "Time is your friend and compounding interest is a force of nature," she says. "You'll always be glad you bought now."

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Here's why experts suggest you start investing today, even if you expect rougher times in the market tomorrow.

Time is on your side as a long-term investor

Putting money into the market when you think things may soon be headed down can feel counterintuitive, but that kind of short-term thinking can get in the way of your long-term plans, says Zohlen. "Given enough time in the market, we'll always do better," she says. "There's nothing more powerful for an investor than time."

Consider the hypothetical example of the unluckiest investor in the world, who had $10,000 to invest and plunked it all into an index fund tracking the S&P 500 on October 9, 2007. Whoops. That day marked the beginning of a bear market: The S&P plummeted nearly 57% by early March 2009.

What would have happened next? Assuming he stayed invested, by the fall of 2012, he broke even. Five years later, he doubled his money. By November 2020, he had $30,000.

The S&P has posted an annualized return of more than 9% during his time in the market. Today, his initial $10,000 would be worth about $35,000.

Timing the market doesn't work — here's what does

"Wait a second," you may be thinking. "Wouldn't our hypothetical investor have done better if he waited for the bottom of the market?"

Sure, but good luck figuring out when that is going to be, says Ellen Rogin, a CFP and co-author of "Picture Your Prosperity," since even professionals struggle to do it with any accuracy. "If stocks are headed down, are you going to pull the trigger then?" she says. "What if they go down more? How are you going to know where the bottom is?"

"If the market went up during a pandemic and after an insurrection, if you're trying to guess what moves markets, you're not going to be able to," she recently told Grow.

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What's more, even if experts are saying that signs point to an imminent bear market, they could be wrong. Comb through the archives of your favorite financial publications and you'll find warnings of doom every year between 2009 and 2020 — a period over which stocks climbed by 400%.

"Markets go up and markets go down. Your best bet is to dollar-cost average," says Rogin, referring to the practice of investing a set amount of money into the market at regular intervals. "You're buying more shares when they're cheaper. And whether you invest at the high or the low, over a long period of time it doesn't make much difference. Getting in the habit of investing consistently is what's really important."

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