Hello š»
So far, we have decided
- Which fund manager/broker to buy ETFs from after researching the fees
- Understand the difference between investment & speculation
- Decide asset allocation (including speculation)
- Decide country allocation
Now, you are ready to start investing. So when do I start???
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You can start today, tomorrow or next week. It really doesnāt matter. As long as you donāt put all your money at once!!
The safest way to start investing is to set up a monthly contribution of a set amount depending on the total amount you want to invest for that tax year. In this way, the market fluctuation risk is diversified over 12 months.
But then, I want to buy when the shares are cheap & sell when they are expensive! Yes, of course, we all want to do that.
How do you know when the market is cheap???
We can all look at the past charts and say āThis was the cheapest pointā That is very easy.
You might think now is the cheapest point, but how do you know if it is not going to get any cheaper from here? Or you could be right and the price might go up from here.
Basically, it is not worth gambling on the market timing. You just donāt know when is the best time to buy. That is why you keep buying over a period of time to diversify the risk.
If you feel strongly against the monthly contirubion idea, then you will be taking more market timing risk. I guess you could spread your purchase timing over 3-4times??
Iām going to explain this concept of diversifying the market timing risk next time. Maybe using some numbers – I will try anyway š
My happy samurai life in London š«
Hinata