


When it comes to picking an investment, we all want to get the most bang for our buck. To that end, we might spend months waiting it out and watching the markets to measure our options. The Simple Dollar points out this might not be that great of an idea:

[I]t will take a very long time for a poor investment choice to have a significant negative impact on you, but it doesn't take much time at all for the choice to not invest to have a negative impact on you.

Let’s say, for example, that you’re able to put aside $100 a month for retirement. You can either start putting money aside right now in a investment chosen at random that earns 6% per year (on average), or you can give it six months of study and choose a much better one that returns 7% per year.

How long before the 7% investment catches up with the 6% investment?

A little over 11 years.

Of course, that doesn't mean that you should just throw all your money into the first stock symbol you recognize from the TV. However, whether you're looking at stocks, mutual funds, and ETFs, or just picking a retirement plan, waiting for the perfect moment to dive in may have worse consequences than investing now and switching investments later if you have to.

When Should I Invest? | The Simple Dollar

Photo by James Robinson.