The stock market has hit a few speed bumps lately. The NASDAQ dropped nearly 20% in the first week of February and is now recovering. In fact, the recent dip may be just what investors need to get excited about investing in stocks and buying now again. After all, it’s still cheaper than ever to invest in blue-chip companies, and now might just be the perfect time to jump back in again.
Investing can seem like a scary proposition at times (especially when you look at how much some celebrities have lost from their original investments) where big-name investors lose billions of dollars even though they have been investing for over 30 years. But with the right information, risk control measures, and long-term outlook, you can still make smart investments that will help your savings grow. Here are three reasons why it might be time to invest now and not wait any longer.
Stocks are at a Discount
If you’re worried about timing the market, don’t be: you can also buy cheap. In fact, this is the primary benefit of investing through a long-term strategy: You can buy shares of high-quality companies at lower prices and see them grow over time. When you invest in stocks, you’re buying shares of a company. And when the company is doing well, those share prices will rise, too.
Yet if you buy a stock when its price is very high, there’s not much room for it to grow. That’s why it’s best to invest through a long-term strategy. If you buy stocks when they’re high and sell them when they’re low, you’ll do little better than if you put your money in a savings account. You’ll also likely be more stressed out, too. That’s because the stock market is incredibly volatile, with share prices rising and falling more than the majority of people can stomach. But when you buy stocks when they’re low, you can start to see your money grow without even noticing it.
This is why many seasonal investors recommend the dollar-cost averaging investing method to remove any emotion from investing and make investing quotes “boring”. Know that investing is a long-term investment horizon (15 ~ 30 years), so you should only be checking your investment portfolio once a year only to see if you are on track.
Company Stocks Are Good Long-Term Investments
Investing in quality company stocks has a long track record of success. In fact, blue-chip companies like Apple, Amazon, and Microsoft have been some of the best investments in the world for decades now. And since the financial crisis in 2008, many of these companies have been incredibly undervalued. Their stocks have fallen massively, creating a perfect opportunity for new investors to jump in and start buying.
Company stocks are good long-term investments for another reason, too: there’s little chance of the government suddenly seizing them. Bank deposits, government bonds, and gold all have a chance of being suddenly nationalized. We have seen this problem firsthand during the Russia-Ukraine war where a number of equity is being frozen by nations all around the world to prevent Russia’s $330billion equity from having the opportunity to fund more for their war in Ukraine. But company stocks are still private property — and they’re unlikely to be controlled by the government at any point. And that’s especially true if you’re investing in American companies.
Markets Usually Rebound After A Correction
Finally, it’s important to remember that markets always rebound after a correction. While the recent dip may seem scary, it’s not the first correction we’ve seen — and it won’t be the last. That’s because stock markets are inherently speculative. There are no set rules for how high or low share prices will go. Instead, the market is open to whatever the majority of investors believe.
So if one company announces disappointing earnings, or if a new competitor emerges, investors will start to sell shares. This, in turn, lowers the share price and leads to a correction. Corrections are, in fact, a good thing. They allow investors who’ve been waiting to buy shares a good chance to do so at a lower price. And they also give people who were on the fence the chance to get in while the market is low.
There are plenty of reasons why now is a great time to invest in the stock market. You can buy stocks at a discount, and company stocks are good long-term investments and the lower it goes the higher the upside for a potential stock rebound. Just know that investing is a long-term journey and having emotion in it will ruin your long-term perspective of it.