One of the most frequent questions I get asked is: “When’s the best time to invest?” The answer is: The best time to invest is when you have money. The reality is that market timing is impossible, and since purchasing ordinary shares of companies traded on a stock exchange (which is called equity investing) is the best way to preserve value, rather than leaving money in a bank account, it is most advisable to just get going. Don’t wait for the fabled perfect moment. That answers the question of when to buy, but what about knowing when to sell? My advice on that issue is that an investment should not be sold unless a much better investment has been found to replace it.
“The best time to invest is when you have money.”
—Sir John Templeton
To me, more important than the question of when to invest is the question of where to invest. My bias rests with emerging markets. Emerging markets are the financial markets of economies that are in the growth stage of their development cycle and have low to middle per capita incomes. The opposite of an emerging market is a developed market, the financial market of a mature economy with a high per capita income.
Emerging markets possess a greater upside in the long term because of their strong economic growth. Specifically, they offer the best opportunity for higher returns and diversification. It might also surprise you to know that emerging economies account for about two-thirds of the world’s land mass—that’s a large part of the ...