What is the Best Time to Invest? 4 Factors to Consider

What is the Best Time to Invest?
4 Factors to Consider

New to investing? Maybe you’ve heard of the investing technique of timing the market. In other words, you’re waiting for the right time so you can pay the lowest price on your investment. If you wait to pay the lowest price, you’ll gain the highest amount of appreciation. But is there such a thing as the best time to invest?

Best time to invest in the stock market

When it comes to investing in stocks, there is no such thing as the right time. Even experts don’t know the exact day, time, and year to invest. If you wait to invest or are trading too often, you’re actually losing. Since the stock market has ups and downs, investing in the market is all about the time spent in the market, not choosing the right time.

If you’re in good financial health and have extra cash on hand that’s sitting in the bank, start investing and invest regularly. The longer you’re in the market, the more your investments will grow. If you don’t know what to invest in or aren’t comfortable investing, start investing in a sector funds/ETFs or in the S&P 500 index. Remember not to invest more than you are willing to risk.

Best time to invest in real estate

Why should you invest in real estate when stocks can provide high returns? Real estate offers more stability than the stock market.

When it comes to investing in real estate, timing plays a more important role.

There are 4 time-related factors you need to consider before investing in real estate:

1. Financial health

Similar to stocks, you’ll want to make sure you’re in good financial health before investing. Make sure your debts are in control and you are not taking on more debt to finance a down payment. Additionally, you’ll want to wait to have the cash available to pay for a down payment. Being in good financial health will get your mortgage approved.

2. Buyer vs. sellers market

You’ll want to know the historic market trends of the city or neighbourhood you plan on buying in. In particular, you’ll want to know if it’s a buyer’s or a seller’s market.

In a buyers market, there’s more supply and less demand. This means the buyer has the power to negotiate better deals.

In a seller’s market, there’s more demand and less supply. This means the seller has the power to negotiate deals. To determine a buyer’s or seller’s market, you can look at “days on market” and trends in home sale prices. A low days-on-market rate indicates a seller’s market. A high rate indicates a buyer’s market.

An increase in home sale prices means it is a seller’s market whereas a decrease shows it’s a buyer’s market.

3. Time of year

You’ll generally find lower housing prices in the winter compared to the summer months.

Because of the holidays, there are fewer interested buyers in the winter, giving you an advantage in negotiating the price.

The second best time of the year is the spring, when there is an increase in the number of available properties. If you start early with your mortgage pre-approval,  you have a higher chance of securing a good deal faster.

4. External factors out of your control

Global events like a pandemic or the 2008 global financial crisis can affect real estate.

If you’re looking to buy a rental property, these events might impact your ability to find tenants and their ability to pay rent. Consider the risks of investing in a rental property during these times and purchase rental insurance.

While investing in the stock market can be risky and real estate can be a lot of upkeep, BuyProperly mixes the best of both markets. BuyProperly is a fractional real estate company that allows anyone to invest in real estate with just $500.

This innovative solution is like investing in stocks without the management that goes into real estate ownership. Ready to start investing? Head over to their website to start investing in BuyProperly.