How do you determine the right time to invest?

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5 min
By Birdee
There is no right time to invest. To succeed in your investments, it’s better to start early, over the long term, in a recurring and diversified manner.

All investors ask themselves the same question: when is the right time to invest? Am I too young, too old? The markets are like a yoyo, so do I even want to go there? Interest rates are at their lowest, would I do better to wait? In short, there is the impression that this is never the right time. And yet, think again, the best time to invest is… now!

Stock markets are always rising… over the long-term

First of all, nothing and no one can predict the developments in the financial markets with certainty. The only concrete things available to us are historical market data. While it is worth remembering that ‘past performance does not prejudge future performance’, statistics can be produced based on these that offer forecasts for the future.

Moreover, despite all the difficulties that the world economy may have encountered for decades – financial crises, oil shocks, international tensions or, more recently, the coronavirus pandemic – the prices of the main world indices are all on the rise over the long term. According to a study based on the S&P 500 indices (1966-2018), MSCI World (1969-2018), and data from INSEE, we note, for example, that:

  • Since 1970, investing in international equities (via a World ETF, for example) has brought in around 5% per year, net of inflation;
  • Periods of market declines occur every 6 years on average and markets decline by 33%, while periods of increases are five times longer and the rise reaches more than 250% on average;
  • Six of the ten best trading sessions on the MSCI World Index (global equities) took place a few weeks after eight of the ten worst trading sessions. Statistically, we therefore often benefit from a sharp increase after a sharp drop.

To put it simply, if we look at the curves, the stock market has been increasing in value for over a hundred years. Of course, that doesn’t mean this will always be the case, but history shows that no matter the entry point, a long-term stock market investment always pays off.


Invest as early as possible

There are many savers who ‘wait for the right time’ and let their money sleep in low-risk, low-income savings accounts. At first glance, it is the choice for security in this period of uncertainty, but it is not so – on the contrary, in the long term, inflation leads to a devaluation of savings. In the end, you lose money over the years.

When it comes to investing, our best ally is time. The earlier you start, the more likely you are to succeed with these investments. Why?


  • As we have seen, investing for the long term is the best way to smooth out market If you are aiming for too short an investment horizon, you will be taking disproportionate risks to make money quickly and, unless you are very lucky, you will suffer from price volatility. Be patient.

  • Another example is with bank accounts. By investing early, you benefit from compound interest. To put it simply, interest earned one year also earns interest the following year and so on. For example, if you invest €1,000 today with a return of 5%, you will receive €50 interest the following year, then the next year the calculation will be made on €1,050 at 5%, i.e. €52.50 in interest… and so on. It doesn’t sound like much, but €1,000 invested at 5% for 40 years will net you €7,040, without doing anything!

  • Lastly, starting to save and invest your money early allows you to discover how financial products work, not to be tempted to spend everything, to anticipate the major stages of your life, and to invest in a more relaxed way (yes, all traders are stressed).

The right time to invest… is therefore today! But investing over time is not the only criterion to take into account.


Invest on a regular and diversified basis to minimise risk

While you cannot determine with certainty THE perfect time to invest, why not invest your money on a recurring basis, so as not to miss out on opportunities? Regular investments, with smaller payments than all at once, makes it possible to ‘enter the market’ at different price levels and therefore smooth the average purchase price of the various vehicles. The risk is minimised because you profit from the increases and you compensate for the decreases.

At Birdee, our life insurance or securities account contracts allow you to make scheduled payments at the desired frequency and at no additional cost, spread over different vehicles to maintain good diversification. This is also the other important criterion for successful investments: the composition of your portfolio must be diversified (stocks, bonds, ETFs, etc.) and varied (several securities, several sectors of activity or geography, etc.). The more your assets are spread over several asset classes, the more you will limit the risk taken.


In short, the ideal timing does not exist (by dint of waiting, we risk… doing nothing), and since no one is able to predict the future, it is preferable to invest as soon as possible, over the long term, on a recurring and diversified basis. To help you do this, Birdee offers, for example, a securities account starting at just €50, with several portfolios that suit your profile.


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