The Street: “Is Now a Good Time to Start Investing? Why Waiting Won’t Help” Marguerita Cheng explains the key is — Timing the Market vs. Time In the Market

September 14, 2020 — In today’s issue of The Street, the NerdWallet column insists, “Naturally, new investors are wary. But that shouldn’t mean staying out of the market. 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.”

Timing the Market vs. Time In the Market

Reporters turned to Marguerita Cheng, CEO of Blue Ocean Wealth Management, who explains: 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.“The best way to build wealth is to stay invested, but I know that can be challenging,” Cheng says in an email interview. “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. (See how compounding gains work with this investment calculator.)

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