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Have you ever wanted to start investing, but wanted to wait for the right time? Some people put off getting into the stock market for years – or forever – as they wait for what they hope will be the right time.
Roger that. Successful investing involves buying something for less than it’s worth. So it makes sense not to want to overpay.
But the signs may confuse you. On the other hand, the economy is lacking. If you are against that, we have already seen the blue-chip FTSE 100 An index of Britain’s leading shares hit a new high all the time up this month.
Market timing can be a problem
I think it would be helpful to step back from the question and ask what exactly “the right time” for someone to start investing might look?
Some of that will be personal to them. Does their financial situation give them enough opportunity to start buying stocks, even if only on a small scale? Have they decided why they want to invest and set some goals?
Also, have they taken the time to learn at least the basics of important concepts like how to value stocks and how to diversify a portfolio to help reduce risk?
But there is a common point as well. There may not be one”best” or “even worse” time to start investing. To some extent, it depends what the investment a person makes.
Many people try to time the market by guessing what they think will happen next. But that can only be a guess.
Choosing to share each
When I say the right time to start investing depends on how much you make, that’s because stocks don’t move in bulk. Even though the overall market may seem expensive, there may be some stocks that are selling. Conversely, even after a market crash, some stocks can still be more.
That helps explain why I like to buy individual stocks (as part of a diversified portfolio), rather than an index tracker.
One assignment to consider
In the meantime, one share that I think investors should consider is FTSE 100 property manager IM&G (LSE: MNG). The asset management market is huge and likely to remain so for a long time. The math involved means that even small commissions can add up quickly.
With its strong product, deep knowledge and customer base of millions across several markets, M&G has proven its ability to generate cash at reasonable scale.
That allows it to fund a juicy dividend. The current yield is already 6.9% – it’s gone twice the FTSE 100 index – and the stated company’s objective is to continue to increase its dividends per share annually.
Will it succeed? Dividends are not a sure thing for any company. One of my concerns is that M&G may see policyholders taking out more money than they put in. That can hurt money production.
From a long-term perspective, I’m happy about M&G’s outlook.
Readiness to invest
Of course, before one can start investing, one needs a platform to do so. That could be a shares trading account, a Stocks and Shares ISA or a trading app, for example.
After investing in the chosen vehicle, they can start buying shares.
