The Costs And Benefits Of Waiting To Invest
- Topics:
- Commercial Lending
- Tags:
- Benefit,
- Finance,
- Financial Accounting,
- Index Funds Advisors,
- Investment,
- Investor,
- Stock,
- Stock Market,
- Study
- Source:
- Index Funds Advisors
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Overview: Many investors periodically find themselves with a significant sum to invest in the stock market. Such cash might include money from bonuses, profit-sharing distributions, or just accumulated savings. Should the money be invested immediately or should investors wait for a better time to invest? The Schwab Center for Investment Research completed a study that offers some answers. The best action investors should have taken in this study was to decide on an asset allocation strategy and then fund the equity portion at the first possible moment, given their risk tolerance, needs, objectives, time horizon, etc. The study also showed that the rewards of timing were not very significant—even for perfect timers. Even badly timed stock market investments were much better than no equity investments. As you help your clients reach their financial goals, keep this study in mind. While it is tempting to wait for the “best time” to invest—especially in record-breaking market environments—remember that the risk of waiting has been much greater than the potential rewards.
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Format: PDF | Size: 609KB | Date: Jan 2000 | Pages: 10
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