The hardest time to make an investment decision is now. Currently, the issue confronting prospective investors is the extent of the market recovery since the 2008-09 lows and whether it would be smarter to wait for a correction. If the market does weaken, the new big question becomes, “how extensive will the correction be and when is the best time to step in”.
In addition to worrying about market levels, there is also the almost endless litany of international events that may have a near-term or longer term affect on market valuations. Unrest in the Middle East, sabre rattling by Russia along its borders, China’s efforts to extend its influence into international waters and unrest in a number of countries are all potentially, sufficiently disconcerting as to impede investment decisions.
Let’s agree, markets fluctuate and we live in an uncertain world. What to do?
First, accept the fact that no one, not an advisor, not a clairvoyant, no one is able to tell you “now is the time, go all in”.
Second, recognize that investing is a long term process, not a spur of the moment exercise. Work with your advisor(s) to develop a long term strategy that meets your requirements and reflects your financial situation and then implement that strategy. Fixating on the latest news flash is unlikely to be a useful substitute for a carefully developed, thoughtful approach.
All comments and suggestions are welcome.