Is it time to invest?

“Heng, markets are up, Donald Trump going to sign trade deal with China, Boris Johnson won (UK) election by a landslide, PMI is up, unemployment is down.

But…

The ten year recession cycle is coming. Is it time to invest?”

This is a very common question, especially if it is hard earned money. It doesn’t help when all the investment successes you hear from your friends and relatives are all about correct timing.

“I’ve invested during the 2009 crisis, now I’m XXX% return”

“I bought this property in 19XX, I sold for massive amount of profits, now I’m conserving cash and waiting for the next downturn”

When is the next downturn? That is the million dollar question. If you time it right, you strike it rich.

Unfortunately, that is the kind of observation that is unhelpful and unactionable, for most people. Some Traders are born with the instinct to time correctly and make profit consistently. Most people get lucky once but could not repeat the act, or do it consistently enough. Timing is the sort of consideration which paralyses people from investing all the time. It’s never the right time.

In my experience, seasoned investors who are honest with themselves and care enough about the people asking for advice, usually default to 2 suggestions – either buy blue chip stocks, or buy property from blue chip Developers. Blue chip here meaning well established companies with long term solid track record.

There is some wisdom in this thinking. Warren Buffett articulate it best when he suggest most people to just buy index linked stocks and hold it.

Essentially, what all experienced investors understand implicitly is that, even if you do not have the time, education or experience, putting money in a totally boring company with solid foundation beats: not investing and/or investing in risky investments.

Why does this work? Put another way: market always rises. Whether thru population growth:

Rising of middle classes

Increasing productivity

Continuing inflation

Which means investing for the long term, we will always make money. If we try to time the market, we may never make the entry. And, once we time our entry, we then will have the problem of timing our exit. It is just too much problem for most people who just wants to enjoy their hard earned money growing in a worry-free manner.

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