MSN Money: “In a Year of Uncertainty, Should You Still Buy Stocks?”

August 29, 2020 — In today’s issue of MSN Money, reporter Chris Davis writes: “Tens of thousands of people turn to Google every month to see if now is the time to invest. It’s a loaded question, especially this year: In late February 2020, the S&P 500 began a monthlong decline, finding what investors hope was the pandemic floor on March 23. Historically, it has taken an average of about two years for the market to recover from a crash; this time, it bounced back in just 149 days. By the end of August, the index was once again hitting record highs. Stranger still, this unprecedented recovery came amid dour headlines, with U.S. unemployment hitting an all-time high in April and remaining above 10% through July. Between the stock market’s erratic behavior and economic uncertainty across the globe, investors are understandably wary. But that shouldn’t mean sitting out of the market.”

Davis turned to Marguerita Cheng to discuss an essential element when it comes to buying stocks: Timing the market vs. time in the market.

Davis shares: According to Marguerita Cheng, a certified financial planner and CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland, when you start investing isn’t as important as how long you stay invested. And that’s a maxim to remember in a pandemic, too.

Marguerita explains: “The best way to build wealth is to stay invested, but I know that can be challenging. It’s easier if you invest only for long-term goals. Don’t invest money you may need in the next five years, as it’s highly possible the stock or mutual fund you purchase will drop in value in the short term. If you need those funds for a large purchase or emergency, you may have to sell your investment before it has a chance to bounce back, resulting in a loss. But if you’re investing for the long term, those short-term drops aren’t of much concern to you. It’s the compounding gains over time that will help you hit your retirement or long-term financial goals.”

Click here to learn how compounding gains work with the MSN News investment calculator.

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