Investing q for those with knowledge about such things

amother

Mon, Jun 08 2020, 11:17 am

If I have money I want to put into savings should I do it now or is now a bad time since stocks are going back up? Should I wait to see if they go down a bit and put my money in then? Have they not gone up enough yet so it's still a good time to put it in or does it make such a little/no difference that it doesn't matter when I do it?

amother

Slateblue

Mon, Jun 08 2020, 11:24 am

No one can time the market. The best you can do is invest a set amount monthly in an index fund that mimics the market as a whole. Depending on your age and risk tolerance, you should keep some money in cash, some in bonds, and some in real estate.

doctorima

Mon, Jun 08 2020, 11:27 am

You asked about putting into savings, and then asked about stocks. Which one are you asking about, as they are not the same? If you mean savings, then interest rates are quite low, but will stay that way for quite some time, so you might as well go ahead and do it.

If you mean stocks (I think you do), personally I'm nervous that they've gone up too much too quickly on the hope of a perfect reopening, and if there's a second wave or any need for more curbs and restrictions, they may quickly backtrack, so I'd be hesitant to invest right now in such volatile times.

icedcoffee

Mon, Jun 08 2020, 11:39 am

While it's likely that it will go down again, it's never a good plan to try to time or predict the market. The money in there should be intended to stay there for at least a few years, so whether you do it now or a few months from now, the idea is that there will be long term growth. Make sure it's not money you need for the immediate future and be sure to have an emergency fund first.

SixOfWands

Mon, Jun 08 2020, 11:44 am

doctorima wrote:

The market never tanked the way that many of us feared. Perhaps because large corporations used covid as a means to reduce the number of employees, making the remaining employees cover the gap and making the corporations more profitable. Maybe we'll see a correction, but I don't know.

OP, the most experienced professionals can't always predict market trends, so a novice certainly can't. IMNSHO, start investing with index funds, then move out from there. And remember, while all stocks (and funds) are volatile, the general trend of the market (NOT individual stocks, to be clear) has always been up. So weather the storms, and stick to it.

And don't forget your retirement fund. If you put just $2000 a year in starting at age 25, you'll have over $400,000 at retirement. Not enough, but an illustration to show how it grows.

amother

Forestgreen

Mon, Jun 08 2020, 11:58 am

As others have pointed out, are you talking about "savings" or "investments"

If you don't have at least six months of living expenses in a completely safe liquid account, you shouldn't be purchasing stocks.

You can't predict what the stock market will do. However, in the long run, it is the only way to grow your investments because in the long run the stock market goes up. However, if you needed your money in 2008 and had to sell, it would have been been bad.

I have investments and for the most part they are worth more than when I purchased them but they have been purchased over a long period of time. With certain exceptions, buying a low cost index fund from Fidelity or Vanguard makes the most sense. Even blue chip stocks can be hazardous - Disney was considered to be a completely blue chip safe stick - who could predict the pandemic which essentially shut down all its revenue streams causing its stock to tank and not fully recover.

The market is strong although the economy is weak. To a great extent (at least IMO) it is because there is no where else to put money so most people and professional institutional investors are just leaving their stocks. Where else can they put their money with interest rates effectively zero?