Is Now a Bad Time to Invest?

As most people are aware, the economy is currently not at its strongest. Does that mean it is a bad time to invest in stocks and shares? The stock markets don’t exactly appear to be getting stronger, and some are predicting gloom and doom for some time yet. This prompts the question of whether it is too risky to invest at this time.

There are a lot of ifs and buts as to whether it is worth investing or not. If you are not spending money, then what else are you going to do with it? Are you just going to leave it in a regular bank account? With the current low interest rates it won’t do much in the bank, with inflation rising quicker than your money will. Even once interest rates do rise, you would need a lot in the bank to see any real difference. Therefore, for growth, something needs to be done with it.

If you don’t want to take risks but do want your money to grow, then investing in a cash ISA might be wise. It doesn’t have the potential growth of a stocks and shares ISA, but there are no risks. Some may think of this as a sensible and more secure way of saving right now as you will not be losing anything, and could later switch into a stocks and shares ISA once things look better and significant gains seem more likely.

Some people will already be investing but might be wondering whether or not they should carry on. This is particularly likely if the value of their investments have already fallen. If this is the case with you, you might want to cut your losses but at the same time won’t want to sell any shares at a low point, losing what you put in. This could be a tough decision; losing money is never good but you may not want to risk losing more than you already have.

You might be thinking, is now the perfect time to invest? Some stocks could be at or near their low point and will increase again. And there is nothing better than buying low ahead of a rise in value, and later selling at a much higher price. For some stocks now is likely to be a low point. If you can find the right investments, looking for stocks at their low point could be a good investment strategy. If timed right it could indeed be the perfect time to invest but it is hard to predict when the low point is, and getting it wrong could mean losing all that you put in. At some point the stock markets will improve but getting the timing right is risky.

So overall, is now a bad time to invest? Well, it depends on the investment. It is a time when certain investment will be very poor choices but you could also time things just before they rise again. The sensible thing to do is seek some expert legal advice to help you decide when the right time is to invest in a particular investment product.

Andrew Marshall ©