• Rianka

Greenwood | Understanding the Right Time to Invest in the Market

Updated: Mar 30

Rianka R. Dorsainvil, CFP®



Ever wonder when the right time to invest in the market is? It’s a question I hear frequently from my clients. Imagine trying out for the varsity team and finding out you made it. During the first practice, your coach sits the team down to talk about commitment, hard work and patience. They say “if you can’t show up and give it your all, this might not be the team for you.”


Very similar to investments—you’re either in or you’re out.


Just as every financial journey is unique, so too are investment strategies; a careful curation based on an individual’s goals, income, and culture.


So, when is the right time to invest?


My best advice is to invest in yourself before investing in the market.


In practice, for me that meant creating three buckets:

  • paying down debt

  • setting up/funding my emergency account

  • investing in my financial knowledge

I always love a good plan, so look at how I break these three buckets down:


1. Focus on Paying Down Debt


Similar to the satisfaction we get when cleaning a messy house or finally tackling that growing stack of paper; focusing on paying down debt is one of the best housekeeping tasks you can do to get your financial house in order.


For many of us, high consumer debt is that messy area of personal finance. It can be all too convenient to carry a revolving credit card balance over from one month to the next; but even if the amount is small, an average 18% APY can really add up. At that point, we begin to not just waste money, but toss away potential earnings in the market.


So, while it might not be fun to allocate extra funds to a source that’s not demanding immediate attention (they actually want you to keep a balance), it’ll do wonders for your future growth.

I like to think of it as every dollar allocated towards paying off your credit card is an automatic return on your dollar.


How Do You Break Generational Financial Curses?


2. Set Up Your Emergency Fund


After the events of the past few years, perhaps we’re all a bit too familiar with the saying “save for a rainy day.” Yet even if you’ve enjoyed more sunny days than most, it always helps to be prepared.


Whether you have job security currently or are looking for new options, ensuring you have an emergency fund can help with both peace of mind and for planning purposes.


Are you looking at your current savings account and scratching your head? Not to worry. Designing the right emergency savings plan is decently straightforward.


The rule of thumb is to set aside 3-6 months of living expenses (think housing, utilities, food, and more) so you won’t have to pull money from your investment accounts or make dramatic sacrifices to your daily routine. At the very least, you should be looking at $3,000-$5,000 in cash set aside to help you manage a financial jam.


The better news? You don’t have to forgo investing in the market while you do so. Consider it a balancing act: As long as you can hammer out a plan to allocate money to your emergency fund and to your investments, you’ll be setting yourself up for both the short- and long-term.

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