The Single Best Time to Start Investing
I recently had a conversation with my wife that was equal parts hilarious and overwhelming. Did you know, there’s never an ideal time to do things that are good for you?
Who has the time to work out/save/invest/get outside for 10,000 steps/drink 8 glasses of water? As for the single best time to start investing: it simply doesn’t exist!
If you’re any fun (and I’m certain you are), excuses to spend instead of invest are never far away. To make things extra interesting, this spring comes with an extra sense of renewal. After 2 years it finally feels as though we’re getting to the other side of the COVID pandemic. With many restrictions being lifted, life is about to get very busy, and the below excuses will carry even more weight.
Does any of this sound familiar?
Month | Student | Young Adult |
January | Wow the holidays were expensive! It’s a new year though and I’ve made my finances a priority. Let’s dig out of the credit card hole. | |
February | Reading week! Where are we off to? Cancun? Cuba? This week is going to be epic (and expensive)! | Valentine’s Day & Family Day means at least 1 nice dinner, chocolates, flowers. Unlike the column on the left, a blurry night at Señor Frog’s just won’t cut it anymore. |
March | St. Patrick’s Day! This usually coincides with the first, really nice day of the year. The sun is out, the weather is warm and the drinks are cold. You’ll be parting with your green (dollars) for green decorations, green outfits and green beer. | March Break! For those on the left who are reading, this is sort of like Reading Week: except your hours are 6am – 9pm, the people you're carrying around are your kids and you’re in Florida (or some sort of kids’ camp). |
April | Exams! Are! Done! The timing couldn’t have been better. You’re pretty broke! Hopefully you spent the past few months looking for work. | Spring Cleaning & Tax Season Time to see how all the stuff in your shed held up over the winter. Thinking of new hobbies for summer? This is the time to start picking up equipment for those. |
May | May 2-4! Those first few pay cheques always feel sweet. Time to start paying down some debt. | Victoria Day Weekend You’re likely driving somewhere to visit family or enjoy some downtime. Property Taxes also tend to be due around now. |
June | Have you figured out where you’re living next year? Landlords will be looking for first AND last month’s rent. | #WeddingSzn Remember how expensive weddings were pre-COVID? A cocktail of supply chain issues, inflation and some serious pent-up demand mean a gift that “covers your plate” hits as hard as your hangovers these days… |
July & August | Music festivals (National Bank is a key partner of Osheaga), city weekends, cottage weekends, canoe trips, live sports, patios. Costs for all of these have risen and with so much demand (and limited supply) expect to see things a lot more expensive than you remember. Time and money seem to go so quickly during these 2 months. | Music festivals (but VIP passes now, you deserve it), cottage weekends, Jays/TFC games, BBQs, well-deserved time off and more. If you have kids, they’re out of school for 2 months and, unfortunately, you’re not. Have any trips planned? Sending them away to any camps? What about sports? Time and money seem to go so quickly during these 2 months. |
September | Back to School & HoCo Summer was busy, but there were so many people you didn’t see! Now that everyone is back in town, it’s easy to get together. | Back to School This usually means some new fall outfits (for the whole family), school supplies, etc. |
October | Thanksgiving/Halloween You’ll probably be spending some time on the road and on candy/costumes. | |
November | Fall Reading Week – have any plans? It’s also crunch time ahead of exams mean your food budget is probably going up as you spend more time focused on studying vs. cooking. | Holiday Shopping Cyber Monday & Black Friday deals mean you can get most of your holiday shopping out of the way early. Planning a trip over the holidays? You should probably book that now too. |
December | The Holidays! No matter what stage of life you’re in, this is always one of the busiest times of year. Parties, family gatherings, vacation plans and more always lead to a full schedule and a lean bank account. | |
Did any of this sound familiar? There wasn’t even a single piece of economic/market data! I’d encourage you to sit down and do this exercise for yourself as personal events such birthdays, anniversaries, etc. have been excluded. You can’t plan for everything, surprises happen, but sketching things out at a high level should help show you that the single best time to start investing simply doesn’t exist.
However, I would propose the second-best time to start investing is today. As the start of 2022 has shown, “Stocks only go up” simply isn’t true. Stocks fluctuate over short-term time periods and major financial/geopolitical crises can really have things get scary in a hurry. However, the long term trend is "up and to the right" as you can see in the below graph.
My parting advice is: start investing today (or as soon as you can). Begin with an amount you feel comfortable with, it shouldn’t be painful, but you should aim to make it little bit more than pain-free. Time is a massively valuable resource in investing so try and take advantage of it while you can! If you have questions about what to invest in and want to talk further, please send us an email at jmrdwatson@nbc.ca and we're always happy to chat!
Chart via National Bank CIO Office.