I am not a professional stock advisor so please be aware of that. This article was written based only on my experience of investing in Philippine stock market for almost 7 years now.
I have not became rich through stock investing. However, based on my experience, the best time to invest in stock is when the market is down. Meaning, when the numbers are all in red in the ticker.
It sounds contrasting to the common belief that you should buy when the stocks are going up.
Let me explain a little deeper. If you have enough money to buy stocks during crisis or when the market is in bearish state, please do so.
Most people don’t buy stocks during this period because they are afraid that it will be too dangerous to do so. But, as you can see in history, stock market will always go up as the years passed by. You only need to wait for 5 or more years to see the fruit of your investment.
It is also important that you will buy those stocks that will be there for a long time like food companies (URC and Jollibee for example). Additionally, buy those companies that were there at the beginning like San Miguel, PLDT and SM.
I don’t recommend those stocks because I have those in my portfolio. I suggest that you buy these companies because it will stay in times of crisis. It will grow as the population increases and as the time goes by.
However, if you don’t want to “time” the stock market. The other strategy that you can do is to do cost averaging wherein you will buy a quantity of stock in a regular period. For example, you will buy 5 shares of PLDT every month until your desired amount of shares have been reached.
This strategy needs discipline and careful planning so that you can set aside a certain amount of money for purchasing the stock each period. You may also do it automatically. I know COL Financial have that feature wherein you can buy a particular quantity of stock each month or quarter in auto mode but you have to set it in your account beforehand.
To wrap up, the best time to buy stock is when the market is down or in a bearish state when most people don’t want to buy because of the crisis.
How about you? When is the best time to buy stocks for you?
