Beyond The Headlines
The Best Time is Now
What’s the best time to start investing? The best time is always now.
Sitting under a tree this summer, hiding from the heat of the sun, you might have thought about the best time to plant a tree. Or, like I did, quietly said thank you to whoever planted it decades or centuries ago. A Chinese proverb tells us that the best time to plant a tree was twenty years ago, and the second best is now. Investing is the same.
We have seen big market rallies and significant corrections in the last two and half years. We saw interest rates fall to zero and quickly rise again. We saw demand for many goods and services evaporate, then come back with great force and look for a new normal more recently.
It’s no wonder we got asked more often than usual if it’s a good time to invest. We love that question!
We see investing as a lifelong pursuit and, in the case of many of our clients, a multigenerational pursuit. Not unlike planting and growing trees! Whether you invest on your own or with the help and guidance of a professional, it’s important to see investing as something one can do a year in and year out.
It’s true that in some years, potential new investments look more compelling than in other years, but showing up every day and looking is the only way to find out what to buy and when to buy.
When we buy stocks, we intend to hold them for a long time, ideally forever, if possible. That’s similar to planting a fruit-bearing tree. I’m thinking of olive trees that can live for hundreds or even thousands of years and bear fruit for most of their life.
Investing isn’t just buying and selling stocks or bonds; it’s also tending to current investments. We spent a good amount of time watching what we hold. Again, not unlike a good gardener. Not all investments prove to be as long-lasting and productive as olive trees, and we need to part with them sooner.
With stocks, it doesn’t pay to be too quick to judge. Some investments may take a while to start to perform and make a positive contribution to the portfolios. Again, it’s not that different from a fruit-bearing tree that may take years until the first harvest and even longer for the best harvest.
At the same time, in investing, the first price move up may invite anxious holders to start selling prematurely. We prefer to wait and take our time as even bigger gains may be ahead. Patience is very hard to practice when investing, but the payoff makes it all worth it in the end.
The outcomes aren’t often linear or regular. A stock that hasn’t moved in a while may start its sudden ascend out of the blue. It’s rare to see a clear upward trending line in investing; leaps and bounds are more likely.
There is a certain discomfort included in this lifelong pursuit. The best opportunities appear when others panic. These might prove to be the most difficult times for anyone to consider buying stocks, yet given the lower prices, it might be the best time. On the other hand, the worst investments can be made when others succumb to euphoria. Again, these might be hard moments that will test the most disciplined investors.
What’s most important, though, is to see investing not as something you do now and then, when it’s easy and pleasant, it’s rather a permanent ongoing activity, a choice.
Anyone who follows our frequently mentioned mantra: earn, save, invest, eventually realizes that once idle capital accumulates, it’s worth putting it to work. That’s what investing really is – making your money work for you.
Sudden wealth through inheritance or a liquidity event can thrust an individual or a family into the world of investing with little preparation but not much choice to opt out.
As a civilization, we have a longer history planting trees than buying stocks, but the principles are the same. Next time you are enjoying the shade of an old tree, think of investing and remember that the best time to start is now.
Happy Investing!
Bogumil Baranowski
Published: 9/27/2022
Disclosure:
The information provided in this article represents the opinions of Sicart Associates, LLC (“Sicart”) and is expressed as of the date hereof and is subject to change. Sicart assumes no obligation to update or otherwise revise our opinions or this article. The observations and views expressed herein may be changed by Sicart at any time without notice.
This article is not intended to be a client‐specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. This report is for general informational purposes only and is not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally.