With as much social and economic upheaval as the U.S. has endured over the last several months, you would probably think it is a bad idea to take a chance on investing. However, there are many financial experts who actually think it could be a good idea. At least, it could be a good idea in some cases.
Whether or not you should think about investing now is based on a number of factors. Not the least of which are:
-Where you want to invest
-Your expectations of returns
-Your comfort with risk
So, the question you should really be asking yourself is, “Is it the right time to invest for me?”
Yes, You Should Invest Now
The stock market is a reactionary place, with stock values rising and falling constantly, in tune to world events. Right now, with nervousness and uncertainty abounding, many stocks are basically on sale. And other unique offerings have been tailored to allow more people to take part. Fractional shares, for example, are increasingly available. With this option, you can buy part of one share and effectively get into the game for a relatively small amount and lower risk.
So, even if you only have $5 to spare on investing, you can still probably find an option. (Just don’t expect that $5 to turn into $5,000,000 anytime soon.)
Now could also a good time for establishing or continuing to build on a long-term portfolio. 401Ks and IRAs may not show as well as you’d hope in the immediate future. But with their diverse make-ups, they are designed to build value over time.
No, You Should Not Invest Now
If you’re out to make a quick buck, now is probably not the best time for you to dive into investing. Younger investors, especially, may come into the market largely for the excitement of it. These are the investors who set out to buy stocks they pick themselves and then sell them relatively quickly for a tidy return. But today’s market is not the ideal one for this kind of approach.
There’s certainly nothing wrong with buying stock in a company that you’re excited about. However, as mentioned above, when market conditions are as uncertain as they are now, you want to make your investment and then just sit back and wait for as long as necessary until things smooth out. It can take a while for a stock to sufficiently increase in value.
Being Smart About Investing
Any self-respecting investor will tell you, in good times or bad, one of your best tools is information. You always want to research stocks and market conditions. Part of that research should include looking into company management. Have the people behind a company always been financially successful? Is there anything in their background that could affect their company’s showing?
An online search can reveal some salient points about a company’s management. Or, you can get more focused information through a dedicated people search. Simply enter a name, and you have the option of accessing that person’s available public background information.
This could include bankruptcies, liens or judgments, assets, property ownership, and more. It could also tell you some of the other people with whom they’re known to associate, which could also tell you more about the person’s overall level of risk.
Conclusion
Whatever your investment approach may be, looking into a company’s background before buying is always a smart decision.
Just remember, these days, making an investment is all about the long game. As long as you don’t go into things expecting a big and fast return, you are likely to be pleased with the outcome…eventually.
Image attribution: G-Stock Studio – www.shutterstock.com
