Is Now a Good Time to Invest?

As a financial planner, one of the most common questions I receive is, "Is now a good time to invest?" While it would be convenient to provide a simple yes or no answer, the reality is that this question is far more complex (boo!). Anyone who offers a straightforward answer might not be considering the full picture—and perhaps you should be cautious of their advice...just saying.

The truth is, whether it's a good time to invest depends on several factors unique to you, including your financial situation, investment accounts, and personal goals. I know how cliché this sounds and even makes me sigh a bit… but it's true. Investment decisions should always be personalized. A common misconception is investing just for the sake of it, whether it's with extra cash or because you feel you should be doing something (i.e., FOMO). This approach can lead to panic when the market turns, prompting you to withdraw your investments out of fear and, even worse, at a loss. This often happens because you may not have the right framework for investing (to no fault of your own!).

During your working years, you are essentially a forced saver. For example, you may be enrolled in your company’s 401(k) plan, making a deposit into the market every two weeks. As a forced saver, you may not necessarily be rooting for all-time highs or waiting to invest when it's “the right time.” In non-retirement accounts, aka that extra cash you have wanting to invest, it might be a different story. It is extremely difficult to time the market. Timing the market involves predicting when the market is at its peak and when it is at its bottom, which requires being right twice. If you don’t nail both perfectly, it can be very costly. Some have lost more money waiting for the “perfect time to invest” than if they just invested it originally and moved on. A much better strategy is to know why you're investing, how long, and if you should have any defense mechanisms in place as you near retirement. The chart below illustrates the impact of missing the best days in the market. If you missed out on just 10 of the best days, you can see how significant the impact can be! Interestingly, those best days often occur when the market is at a low point.

Having a certain amount of cash on the sidelines for emergencies and big foreseen purchases is prudent to avoid taking money out when the market is not in a position of strength. Think of it like having an umbrella on a rainy day; you don't want to be caught without one when the storm hits. The longer we can keep our invested dollars…invested, the better. This is even more important for those nearing or in retirement. Having a larger cash reserve allows your invested balance sheet to continue growing.

We know that downturns are inevitable, and attempting to avoid them can be detrimental both mentally and financially. Instead, we focus on enduring them with the right strategies. For those older individuals who are withdrawing from their portfolios, a good strategy may be to maintain two years' worth of income (i.e how much you spend a year) in a high-yield savings account. If the market experiences a downturn, you could pause your retirement distributions and utilize funds from those cash reserves. Historically, it takes around 1-2 years for the market to recover, and once it does, you replenish the cash reserves from a position of strength. Now I know this is very high level and this is just one example, which is why a financial planner can be super helpful when exploring which strategy is right for you.

This perspective highlights the importance of understanding your financial goals and how market conditions align with them. If you're in a position to invest for the long term, a market dip can be an advantageous time to enter or increase your investment positions. Conversely, if you're nearing retirement or need liquidity in the short term, your strategy might differ.

Ultimately, once you have those cash reserves, you should always consider investing and continue to make deposits. One of the other main benefits of working with a financial planner is having someone to coach you through volatile market times or understanding which strategy to use and when. Without this guidance, you might make costly mistakes that are difficult to reverse.

One of my favorite financial writers, Nick Maggiulli, wrote a book on this topic called “Just Keep Buying,” which I highly recommend for a deeper dive into this philosophy. No, I do not get paid on this endorsement, but here is a link if you want to check it out: Amazon – Just Keep Buying by Nick Maggiulli.

If you want to discuss further, shoot me an email. There is a lot more to the investing world (crypto, meme coins, etc.) that probably deserves its own blog post. Remember, investing is a journey, not a destination, and having the right guidance can make all the difference.

It’s easy to feel stuck with money. It's harder to have clarity and a plan you trust. If that feels like something you've been missing, let's talk about it.

Schedule Discovery Meeting

Nick George CFP®, ChFC®, CLU®

Founder | CERTIFIED FINANCIAL PLANNER® Practitioner

ClearMind Capital

The information presented in this article is for informational purposes and should not be intended as tax, accounting or legal advice, nor is it an offer or solicitation to buy or sell, or as an endorsement of any company, security, fund, or other offering. Please consult your legal, tax, or accounting professional regarding your specific situation. Investments involve risk and have the potential for complete loss. It should not be assumed that any recommendations made will necessarily be profitable. 

The opinions expressed in any commentary posted on this site are solely those of the individual author and do not necessarily reflect the views or opinions of ClearMind Capital, LLC. These opinions are based on information available at the time of posting and are subject to change without notice. ClearMind Capital, LLC, does not commit to updating any posted positions or commentary to reflect subsequent developments. While the information and reasoning used to form these opinions are believed to be from reliable sources, ClearMind Capital, LLC, does not verify this information, and no guarantee is provided regarding its accuracy, completeness, or validity. ClearMind Capital, LLC, disclaims any and all liability for actions taken or not taken based on the content of this site. No warranty, express or implied, is given in connection with the content provided.

Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.