Investing Early VS Investing When It’s Right

Investing Early VS Investing When It’s Right

Read time: 4 minutes, 02 seconds.

One thing that you can be sure about when making investments is the risk factor. There is always going to be some level of risk involved in your investments. Some seasoned investors  will tell you that there’s no right time. You just have to take the risk. Yet, you will find others that believe quite the opposite. Some will say that they have found the key to the market and can tell the best time to go all-in or fold.

Studies show that the number of new investors has been on the rise since the pandemic. Plus, out of the roughly 9 million investors across the country, women account for nearly 50%. It is important to note that the 9 million investors mentioned, account for diverse portfolios. So we are talking about people who have investments outside of the main property they own and their super.

The truth is that your investment strategy informs the types of results that you get. So let’s look at what you can expect when choosing to invest early, or wait for the right time.

Investing Early

“It is best to start investing earlier in small increments rather than invest big increments at a later time.” – Arya Laraya

When you invest early, you get a lot more time to see what your money can do. This type of experience boosts your confidence, making you less afraid of the risks. Let us say, for example, that you start investing early and you take a hit. You will have the time to recover and turn a profit.

The amount of time that you think you have to wait for the money to grow affects how long you leave it in for. When you can put some money away and let it grow, you have a better chance of compounding that over time.

Another advantage of investing early comes in the form of tax incentives. What this means is you can get benefits like a tax offset for being an early-stage investor. According to the Australian Tax Office (ATO), you can get a tax offset of up to $200,000. This $200,000 would be for one income year and would cover both investors and affiliates. Of course, you need to meet their criteria.

Investing when it’s right

There are a few factors that get into deciding when is the right time to invest. The right time to invest has a lot to do with what’s going on with the market at a particular time. Plus, elements like interest rates, as we have seen recently, can also affect how people respond to the market.

Let’s take our current climate, for example. Interest rates are lower than they’ve been in years. The Reserve Bank is still holding the cash rate at 0.1%. As a result, a lot of people have taken the low rates as a sign that it’s a great time to invest in the property market. 

This is a wonderful opportunity if you have the capital to take full advantage. However, it takes a smart investor to notice when the tide is starting to change. For example, generally, you don’t want to be investing right before a market crash or even a recession. Last year when the Covid-19 scare was just starting to take root, a lot of people rushed into selling their investments. While others made use of the low prices because of the panic sales.

Today, with the confirmation from the Royal Bank of Australia (RBA) that this lower interest rate won’t change until 2024, people are more confident. 2024 is when the inflation rate is expected to reach within the range of 2% to 3%. So a lot of investors are feeling confident and want to get in early. This way you can enjoy the most time at this rate. 

When it comes to deciding how and when to invest, it all boils down to firmly deciding when you want to invest and how much. As we mentioned before, a longer-term investment can give you a better chance to make more money. Simply because you will have the time to wait. So keep your eye on the market and watch where the money is going. 

Better still, take the time to reach out to MLS Finance and follow us on our socials.  We keep you in the loop of what’s going on in the market, if you want to stay informed, you can always sign up to our monthly newsletter via our website.  

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