TLDR: Now is the right moment.The earlier you invest, the longer you can benefit from the interest rate. Think long-term and don’t be scared of headlines.
It is said so nicely: in the stock market, the timing is nothing, but the time span is worth everything.
So when you start investing your money, the best time to do so is always “today” – whether it’s New Year’s Eve, Christmas Eve or your grandmother’s birthday.
But why is “now” the right time punk?
Let’s look at examples in detail.
- Apr 2010 – The Deepwater Horizon oil tanker sinks
- Nov 2016 – Trump wins US presidential election
- Apr 2016 – Elon Musk and his Twitter joke on April 1 about Tesla’s bankruptcy
All these events have “felt” massively influenced the market, especially because the media have reported on the market loss due to these events.
But what really happened?
The three main features to look out for in this graph
- Markets went downhill for a short period of time
The negative events all had a negative impact on the financial market
- Markets continue to rise
The perceived “big” events 鈥?rumours, bankruptcies of large companies, misfortunes 鈥?that affected the stock market did not send an ETF into an infinite downward spiral.
Of course鈥?if you invest your money in a single stock, you bet that this company will operate positively.
A mix of many stocks can reduce this “betting risk.”
The magic of the interest rate effect!
The sooner you invest, the more you can benefit from the interest rate effect!
The trick actually only refers to the effect that interest rates have on interest (hence probably the name).
So if you keep your money in your investment account long enough (with a well-diversified strategy and a little attention every now and then), you’ll slowly see how your profits generate more interest. And you don’t have to do anything else!
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