Many of us wonder when to invest in the stock market .
Is there an ideal age to start? Do you have to respect a particular timing to optimize your chances of success?
So many questions that we will try to answer through this article.
At what age should you invest in the stock market?
In general, there is no perfect age to start investing in the stock market .
Generally speaking, the earlier you start, the more benefits you can enjoy – provided you are in a financial position to invest.
Indeed, an early investment in the stock market can make it possible to benefit from higher returns and capital generated. The advantages offered by compound interest tend to confirm these statements.
Legally, you generally have to be 18 or older to invest in the stock market.
However, it is possible to open accounts from the age of 16 in the event of parental emancipation. For the youngest, investing their savings in the stock market is authorized provided that this process is carried out by parents or legal guardians.
But although there is no ideal age to go public, it is still advisable not to start this type of investment before having a stable financial situation.
Could it be too late for me?
If you never had the chance or the opportunity to invest in the stock market when you were young, know that in theory it is never too late to get started: it all depends on your situation.
On the other hand, your investment strategy will necessarily be different depending on whether you are 20 or 50 years old .
As you approach retirement (or the date of realization of any project for which you have invested), it is for example possible that you have to secure your assets and give more importance to euro funds and to bonds than to stocks. But here again, there is no “universal” rule.
Is there an ideal economic situation for investing in the stock market?
You can often ask yourself a lot of questions when looking for when to invest in the stock market. Including questions relating to the economic situation.
One can for example wonder if an investment will be more likely to succeed in a recession, during a period of high volatility, or when the economy seems to be doing well.
Unfortunately, betting on the seasonality of the economy may not pay off . Keep in mind that markets are unpredictable.
It is often much more effective to maximize your time spent in the market rather than trying to enter it at the “right time”.
The important thing is to invest if your situation allows it and according to your strategy.
Markets historically tend to go up over the long term, although fluctuations can be significant.
With a greater “time in market” , you therefore benefit from this upward trend in the market.
And in the event of a crisis or a sudden drop in the stock market? This may represent an opportunity to seize to buy shares “on sale”! But it’s a situation you can prepare for before you start investing.
Indicators to keep in mind
This does not mean, however, that the economic and social context should be totally neglected – especially in relation to its impact on your own situation.
For example, an economic or health crisis like the one we are experiencing with COVID-19 could involve job loss, or other impacts on your personal and financial situation.
In any case, you should only invest money that you can afford to lose.
Also consider building a safety cushion with money set aside in an easily accessible account.
When to invest according to your personal situation
Of course, starting to invest early has advantages, but you shouldn’t embark on this type of investment either if you are not in a stable financial situation.
The goal is to secure your situation as well as possible and to avoid finding yourself in difficulty in the face of a market decline or a socio-economic crisis.
Also, depending on your projects, your investment will not be realized in the same way or at the same time .
For short-term projects, for example, the stock market, which fluctuates a lot, is not necessarily ideal. You could thus find yourself “forced” to sell your shares when the market is down, and therefore suffer losses on your investments.
You can also decide to secure your investments according to the due date of your projects thanks to progressive security systems.
For example, platforms like Nalo are part of the solutions to support you in your investment strategy . This is a life insurance that allows you to invest by objectives, and to secure your portfolio little by little as the realization of your project approaches.
It offers a management method that does not favor a particular economic period, nor does it rely on the price variations of a given asset. It therefore allows you to build the most appropriate asset allocation taking into account your investment horizons and your situation.
Is there a minimum investment amount to invest in the stock market?
Already, no need to wait to have thousands of euros to invest to start placing on the stock market.
Even with more modest funds, you can already embark on the adventure (again, provided you are in a financial situation that allows you to invest).
Again, the time spent in the key market.
Your small sums can then potentially turn into larger sums. To do this, you will need to apply an appropriate strategy and focus on discipline, patience and seriousness.
The only thing to keep in mind is that some banks or online brokers (the platform through which you will invest) may require a minimum deposit at the opening .
Then you can deposit money regularly (for example, every month) if you wish, or simply put your exceptional cash inflows into it. The ideal is of course to place it regularly.