The best time to invest in 40 years

Published in, September 2012 by Janine Cox

In a previous article, I shared with you some great ideas to bring more cash to your bank account so you won’t feel guilty splashing out for that new wardrobe. 

I also made a promise to share why now is the best time to invest in 40 years. 

Before I talk about this, I will share with you some simple truths about investing in how we are different to men and why this gives us an advantage over them.

Our advantage is that we tend to be far more intuitive, however we’re also more conservative when making investment decisions. 

Men tend to have bigger egos and to their detriment as a result, are more likely to take action without proper knowledge, research and advice from experts than women.

I’ve spent many years helping people achieve their financial goals and met plenty of cowboys willing to risk it all, but have met very few cowgirls. 

Let’s face it, we are wired differently but sadly, a lot of women mistakenly believe they need to be a cowgirl to invest. 

Ladies, the first thing you need to know is that without exception it is the cowboys who make the big mistakes and nearly always go broke.

So, what stops women from building their wealth?

Many ladies believe they lack the knowledge or ability to invest and as a result, don’t have what it takes. 

In my experience, the reality couldn’t be further from the truth, in fact ladies can be much better investors than men. Success in anything is usually 80% psychology and 20% skill; understand your psychology and the rest follows.

Studies into investor psychology reveal that:

  • investor sentiments of fear and greed are heightened at the ends of bull and bear markets
  • most investors tend to enter the market near the top and exit near the bottom

Knowing what the masses are doing is the simplest way to work out when is the best time to invest.

It is only after the market has experienced a big fall that the herd get nervous and sell stocks in a panic. 

Most Australians saw their super fund take a big dive in 2008, which caused further panic, seeing many continue to sell shares and other investments to hold cash.

Ladies, history shows that the masses make their investment decisions at the wrong end of a run and over the past few years most people have moved to cash. 

What this means to me is that now is the not the time to invest in cash but rather shares and property are our investment vehicles of choice.

I am not suggesting you all become cowgirls, however, I believe many ladies need to trust more in themselves and their ability to not only gain the knowledge to invest but to put what they learn into practice. 

Once you start, you will find that it is really not that daunting.

Currently, market psychology is negative and this means opportunity. 

So rather than shying away from investing and saying it is too risky, we must learn to take advantage of the opportunities when they present, and now has never been a better time in the past 40 years.

In 2009, the market completed its biggest decline in 40 years, falling over 50 per cent. 

Going back to the late 1800’s, I have found that the Australian share market makes a low approximately every 40 years by around this amount and rises back up over time. 

Given this, the risk to invest now is significantly lower than before the decline.

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