Chart of the week: Right Here, Right Now

Every day, I’m asked: “Is now a good time to invest?”. My answer is always the same, the best time to invest was yesterday and the second-best time is today. But let’s put this to the test.

Imagine four fictional investors, all with £1,000 to invest every month – £12,000 a year, over nearly 20 years. The only difference? Their approach.

Investor One puts £1,000 into cash every month, like clockwork. No risk, no drama.

Investor Two is the unluckiest of the bunch. Every year, they manage to invest their £12,000 at the market’s absolute worst moment – the peak.

Investor Three has perfect timing. Every year, they find the lowest point of the market and invest their £12,000 there, like a genius.

Investor Four knows they’re no market wizard. They simply invest £1,000 at the start of every month, rain or shine, and let the magic of pound cost averaging do its thing.

Now, the chart shows something fascinating.

Cash feels safe, but it rarely wins. Over 20 years, cash returned something positive, but our cash investor was left far behind.

Bad timing? Not as bad as you’d think. Even the unlucky investor who picked the worst day each year still beat cash.

Perfect timing is rare and stressful. While the investor with flawless timing did the best, the gains weren’t as astronomical as you might imagine. Besides, timing markets perfectly year after year takes both luck and skill – a risky game.

The pound cost averaging approach was nearly as good as perfect timing. The investor who just invested regularly every month, without worrying about timing, came remarkably close to the best results, all without the stress of trying to outsmart the market.

You don’t have to be perfect. You just have to be consistent. Timing the market can work, but it’s rare, exhausting, and risky. In contrast, regular investing – especially in a world where interest rates are falling and cash looks less appealing – can give you a solid return without all the drama.

Key Takeaway: The secret isn’t in picking the perfect day to invest – it’s in simply investing. Whether you're the luckiest or unluckiest investor, history shows that putting your money to work beats leaving it in cash.

With interest rates falling, cash is even less appealing today than it was before. So, is now a good time to invest? Absolutely. The best time was yesterday. The second best is today.

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This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.