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Invest When You Have Money, Not According to Stock Market Conditions

Money in hand

There is a fundamental philosophy to good investment, which most people have heard of: “Buy Low, Sell High”. This is a saying that undergirds all sound investment, and it’s a consideration to make before allocating your money for any purpose. But it’s also a philosophy that, misunderstood, can lead new investors to a variety of bad decisions. Not the least of these is trying to predict the market, especially in a stock climate like the one we’re in now.

It’s tempting when the market is circling the drain to invest a bunch of money in hopes that the market will recover and that money will be multiplied several times over. Many people think that this is “Buy Low, Sell High” in action. The problem is, you can’t see the future (so far as I know). People who try to time the market in this way have been compared to a person trying to catch a falling knife. On the one hand, the person might get it just right and catch the knife. On the other hand, the person might mess up and get a nasty cut.

When the market is down, nobody is ever sure if it’s going to stay down. Remember talk of the “double dip recession”? This is what everybody was talking about. Of course, the Market always tends to recover. Throughout its long history, there have been many temporary setbacks, followed by even larger recoveries. But it’s the timing that is uncertain. Some people get lucky, guessing that a recovery as coming and having their speculation justified. But more people get it wrong, as stock picking stats tend to demonstrate.

So what’s the alternative? Well, if you are going to start investing, just invest when you have money. Do this without paying much attention to what the market is doing at the moment. Because the market grows more often than it falls, at least so far (for its entire history), regular allocations into an investment account will also grow more than they lose value. If this habit is kept up for years, then your stock market investments are bound to grow many times over.

But there are even more alternatives to this sort of plan. Rather than invest in the stock market, you can invest in FX, through a variety of brokers, like the one in this XM broker review. FX investments pay off in the short term, where stock market investment is best organized over the long term. Other investments like real estate can fill in the gaps, paying off over months and years, whereas FX is usually set to pay off in hours to weeks.

But in all of these cases, it’s important to invest when you have money, not because you think you perceive a unique opportunity in one market or another. It’s possible to do so (particularly in localized markets like real estate), but you must be confident in your expertise. In the stock market at large, opportunities are so generally scoured for that it’s nearly impossible for the average person to grab at one without paying for it.


  1. Good practical advice….because whatever the market is doing, historically it will eventually go back up. Stock market investments should be for the long term, and over the long term you will make money!

  2. Agreed!
    A great foundation in investing is buying regularly high or low.
    Personally I like to have a little cash set aside for if/when a dip does occur to buy “On Sale”.

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