When is the Time to Invest and When Is the Time to Save?

William Shakespeare once wrote, “to invest, or not to invest: that is the question.” …or something that sounded a lot like that. Just take our word for it. Anyway, this question helps to sum up one of the biggest fears that young investors have today: timing. Especially when you’re just starting out, it can seem like a pretty big deal to even be able to cover your own rent and living expenses – so, how are you supposed to know when it is a good time for you to invest your money? Or, what if right now is a good time for you, but not a good time for the market?

It seems that proper investment timing is a factor of two main variables: your own budget and the will of the markets. We will take some time to address both of these influences and explain the points when they converge into “ideal” investing periods.

First, It’s All About You
When you’re asking yourself when is the best time to invest, the first thing you should consider is your own budget. If you do not already have a budget, it is definitely time to make one! Even a rough outline of your income and basic expenditures can be helpful in estimating how much money you can afford to invest – and when you can afford to do so.

First, think about periods when you might incur larger expenses that normal, such as paying rent checks at the beginning of each month, taking that trip to visit your sister across the country, or buying presents for your family around the holidays – whatever your expenses may be. If you’re working with a tight budget, these may be periods where you should try to save your money instead of investing it, because you will probably want that money to go towards your big expenses instead. If you are working with a looser budget, try to see how much of an additional cost you could comfortably factor in at these times. Remember: whatever the case, the goal is for you to invest your money comfortably – you should probably not be paying your rent late in order to invest your money!

But, there are probably also times of the year that might be “less costly” for you. This is when you jump on your opportunities! For instance, how often are you paid? Can you put some portion of your pay checks away before you think to spend it on other things? This strategy comes in handy for many younger investors, because you will never spend the money you cannot see. If it is out of sight (and invested properly), you can put it out of mind instead of spending! Other instances like this, where you have a little extra money coming in, might be good times to budget in some of your investments.

Ultimately, the first answer about the best times to invest falls on you. To figure out the best times to invest, it might be a good idea to start by budgeting, thinking about when you will have money coming in, and maybe even setting reminders for yourself to put some money away when you know that your funds might be a little bit more liquid!

After That, It’s About the Markets
The next big question that new investors usually have revolves around the idea that there are “ideal” periods of time when the markets are friendlier to investors. We have all heard the saying “buy low, sell high” – and that is indeed the basic strategy that many investors keep in the back of their minds. But, how do we know when the market will be low? Or, when will the prices of our stocks rise enough for us to want to sell?

To figure out when these ideal investing periods may occur, you may want to read up a little bit about both fundamental and technical analysis, which you can find in the articles linked here! These forms of analysis are both methods and metrics to use that can help you monitor the markets or individual stocks. From there, you might be able to get a clearer sense of when the best times to buy occur!

At the end of the day, the best times for investors to buy (instead of saving their money) are probably the periods when their personal budget allowances line up with their analyses of individual stocks or the markets. So, finding the “right” times to buy or to save may take a little bit of self-analysis, as well as reading up about the markets. But, by doing your due diligence, you will surely find that timing is not something to fear!