It is the second question that comes up when you start a Google search for the words ‘is now a’. The first question is revealed at the bottom of this article.

You’d be forgiven for wondering whether you should invest now. Recent political and economic events have spooked investors and markets globally have been choppy throughout 2023. Generally, when things seem uncertain people are uncomfortable with acting and revert to keeping their powder dry. (The American National Library of Medicine have a great article on this topic)¹. For many people they apply the same thought process when it comes to investing.

For and against
The problem is that if you are looking for one, there will always be a reason not to invest. Global conflict, disease, trade disagreements, interest rate rises or just a media onslaught of gloominess are a permanent fixture that investors need to deal with.If you choose to not invest because you are worried markets might fall, then I would encourage you to consider a different perspective.

If you invest and markets fall in the short term, will you be worse off in any meaningful way?

If the answer is yes, for example you plan to buy a home and need the cash, then investing is not the right call regardless of whether you are worried about markets. However, if a short-term market fall wouldn’t actually make a difference in your life, then investing makes sense.

The long-term answer
Truly we cannot know if markets will rise or fall in the next few months, or even couple of years. What we do know is that markets rise over time, and investing is the best approach to grow and protect wealth over the long term. If you keep your powder dry and choose not to invest you may find yourself much worse off over the long term when no short-term fixes are possible.

Essentially, let your investment decisions be driven by your own circumstances and goals, and not your google searches.

The first question that comes up when you start a Google search for the words ‘is now a’ finishes ‘to buy a house’. I’ve answered that question in a previous article linked here. The rule of thumb in this article applies well in that one too.

* Investments carry risk. The value of your investment (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

¹ Behaviour and uncertainty