I hear this so often and it makes me cringe a bit every time, “I want to invest but I’m going to wait until the market dips to buy in”. While purchasing stocks on sale is the goal you can not time the market. There’s no way of knowing when the market will go up or down. Anyone who says they know are guessing or speculating.
Instead you should do one of two things. The first is what I recommend and follow:
- Dollar cost average: divide up the total amount to be invested across periodic purchases of a target asset. Be sure you pick a long enough time period to reduce the impact of volatility on the overall purchase.
- Do sufficient and proper research on individual stocks so you know what the sale price is, then purchase that stock when it’s on sale and wait for it to grow
The second is more risky and not something I recommended, but if you are dead set on purchasing individual stocks then do your proper analysis. I use Phil Town’s methods described in Rule #1 as it follow Warren Buffet style analysis which look at:
- Business
- Management
- Financial measures
- Value
The path to wealth is a journey not a marathon, be patient you will get there. Here’s how I got started on my journey