When is the best time to invest

Here are three lessons which might give a different perspective

Everything Changes – Bear markets have always been temporary. And so have bull markets.

Common wisdom suggests that you should buy when stock markets are at their lowest point and sell at their highest.

In reality this is almost impossible to achieve – no one can reliably predict the exact time markets will finish falling or when they will reach their peak. However, history gives us three lessons:




1. Each bear market has been followed by a bull market

Number of Bear Markets*
9 in Developed Markets 10 in Emerging Markets
Number of Bull Markets*
9 in Developed Markets 10 in Emerging Markets



2. Bull markets have lasted more than three times longer than bear markets

Average Duration of Bear Markets


in Developed Markets


in Emerging Markets

Average Duration of Bull Markets


in Developed Markets


in Emerging Markets



3. Returns in a bull market were substantially more than losses in a bear market

Average Market Decline

in Developed Markets
-30%

in Emerging Markets
-32%

Average Market Increase

91%
in Developed Markets

338%
in Emerging Markets



Developed markets represented by the MSCI World Index. Emerging markets represented by the MSCI Emerging Markets Index. Performance in local currency as at 31/12/2016. Past performance is no guarantee of future performance. An index is unmanaged and one cannot invest directly in an index.

By trying to guess exactly when to invest, you may miss out on some falls, but could also miss some potential rises. Missed opportunities like these can take a bite out of returns.

When anyone asks us, when is the best time to invest, we always answer that the best time to invest is when you have money, because chances are, you are going to hit a bull market rather than a bear market.

Dr Mark Mobius, Executive Chairman, Templeton Asset Management Ltd.

Don't miss out on a market recovery.

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