When is the right time to start investing? | Mint (2024)

FAQs

When is the right time to start investing? | Mint? ›

There is no better time to start investing. It is very difficult to time the markets and although the markets are due for a correction, it would not be wise to wait further. Also, when it comes to SIPs, there is not much merit in timing the markets.

When it comes to retirement, the recommendation is to start as early as possible, even if it's with small amounts, and aim to save around 10% to 15% of your income. For non-retirement investments, ensure you're in a stable financial position and ready to handle the inherent risks of investing.

Typically, when the stock markets begin their trading day, they take a little time to react to any market news that has transpired after the close of the previous trading day. Therefore, it is considered optimal to wait to make investments till news comes out properly and stock markets have had a chance to react.

The stock market's regular trading hours are weekdays from 9:30 a.m. to 4 p.m. ET. However, the market will close as early as 1 p.m. ET on the day before or after certain holidays. Plus, depending on your brokerage or investment platform, you may be able to trade during pre-market hours (4 to 9:30 a.m. ET).

As mentioned above, retirement investing is best done in an IRA or 401(k). Experts generally advise starting in your 401(k) and supplementing with an IRA if you have more money to save. If you use an IRA, you'll need to choose between a traditional IRA or Roth IRA.

A good place to start is to check your attitude toward risk (no sense losing sleep over your investments, after all), as well as how well-placed you are to take on risk, such as your job security and level of debt. That way you can base your investment decisions on an appropriate level of risk for your situation.

Timing the stock market is difficult, but understanding when to trade stocks can help your portfolio. The best time of day to buy stocks is usually in the morning, shortly after the market opens. Mondays and Fridays tend to be good days to trade stocks, while the middle of the week is less volatile.

Buying stocks right now is a great decision for long-term investors. While the stock market fluctuates up and down over the short run, it's consistently increased in value over the long run. There's no better time to invest than right now.

What is the time of investment? ›

An investment time horizon is the time period where one expects to hold an investment for a specific goal. Investments are generally broken down into two main categories: stocks (riskier) and bonds (less risky). The longer the time horizon, the more aggressive, or riskier, a portfolio an investor can build.

One of the most popular and long-believed theories is that the best time of the week to buy shares is on a Monday. The wisdom behind this is that the general momentum of the stock market will, come Monday morning, follow the trajectory it was on when the markets closed.

The 20s: Begin Investing

Because of compound interest, investing during this decade reaps the most growth and time to absorb changes in the market. A trusted financial advisor can help develop an investor's risk profile.

Why start investing when you're young? Many new investors start out investing with mutual funds and exchange-traded funds (ETFs) since they require smaller investment amounts to create a diversified portfolio. The sooner you begin, the easier it will be to achieve your goals.

“New investors, along with having no experience, often have little knowledge about individual stocks and bonds and/or a smaller portfolio as they are starting out,” Cozad said. “To spread the risk out, mutual funds or ETFs might be the best option for a new investor.”

There is no set age to start investing. However, it is highly beneficial to start investing early to ensure you can earn good returns over time. You can even start investing as a minor to ensure better returns based on long-term compounding effects.

"Just like other investors, teens will benefit from a diversified portfolio of low-cost, long-term investments," he says. "However, teens are also in a good place to experiment because the stakes are relatively low," he adds. "If you're 16 and lose all your money day trading, that's a shame, but life goes on."

If you think $100 won't be enough to invest, think again. With a little patience and discipline, you can grow that small sum of money quickly. After all, the amount you invest at first is not really what matters when it comes down to it. It's all about getting started.