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Webcast excerpt: When is the right time to start investing?



I’m reminded of a quote from the great Wayne Gretzky, “You miss 100{f08ff3a0ad7db12f5b424ba38f473ff67b97b420df338baa81683bbacd458fca} of the shots that you don’t take.” And that is true for the markets as well. The magic of compounding Greg talked about: You have to be in the market to have the magic of compounding. Returns are very punchy in the market. There are up days that are unpredictable, 2{f08ff3a0ad7db12f5b424ba38f473ff67b97b420df338baa81683bbacd458fca} here, 1½{f08ff3a0ad7db12f5b424ba38f473ff67b97b420df338baa81683bbacd458fca}, 3{f08ff3a0ad7db12f5b424ba38f473ff67b97b420df338baa81683bbacd458fca} there, and then it stops. And you can’t wait and guess when that will happen. And at the outset I told you that you can’t also guess where valuations are high. You can’t assume that it won’t happen in the future. And so what we say is you should get invested. Get in the markets. Start participating.

Now you may be uncomfortable doing it in a lump sum, so what we would advise is to feather it in over time. Do what’s called dollar-cost averaging. Take six months and put that money to work for you over the course of those six months. You don’t have to do it all at one time for the fear that tomorrow is the day the market goes down. But don’t sit on it for too long because no one knew the market was going to take off after March, and Greg and I can’t tell you what’s going to happen in 2021.

But what we can tell you is that if you’re not invested, you won’t get any positive return.

Important information

All investing is subject to risk, including the possible loss of the money you invest.

© 2021 The Vanguard Group, Inc. All rights reserved.

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