Richard T Lishman: Taking a gamble: is now a good time to enter the stock market?
The stock market is a volatile beast. In the last year especially, the stock market has undergone fluctuations dictated by the global pandemic, fuelled by the uncertainty of the situation, and affected by what this has meant for businesses and other investments across the globe. But, as the market stabilises, is now a good opportunity to look into investing in stocks and shares?
The award-winning team at money4dentists has years of experience helping dental professionals enter the stock market and make sound investments, so, how do we view the current investment situation? Let’s look back over recent events.
In 2020, it took just 33 days for the market to spectacularly crash thanks to the COVID-19 outbreak. During this time, the Standard & Poor’s 500 (S&P – effectively an indicator of the general health of the stock market) plummeted by nearly 34% and some days saw years of gains wiped away in mere moments; however, by mid-August in 2020, the market had made a remarkable recovery.
Against many predictions, the market rocketed with the S&P 500 experiencing record-breaking highs. As you can see – even in the space of six months the market can be completely transformed, in ways that buck the experts’ expectations. It’s best to keep this unpredictable quality in mind if you are looking to enter the stock market – nothing is ever guaranteed.
However, if you want to put a toe in the stocks there are a number of other things you should bear in mind.
Initially, you must have funds available to work with, and take as few risks as possible. If you have unused capital available and its loss won’t impact your livelihood or that of your family and those around you – it might be worth the risk – but remember, the stock market is effectively a gamble. Stocks and shares are only one kind of financial investment, and there’s no shame in investing your funds in a more stable, guaranteed venture.
Anyone can “dabble”
The stock market is open for anyone to dabble in, but that doesn’t mean that you should rush in without thinking. Many people, especially beginners, use the services of a stockbroker, who can share an immense amount of knowledge and help you make a sound investment. Stockbrokers can either be employed to advise you or to buy the shares on your behalf, using their own judgement, both of which are viable approaches, but you need to choose one who best suits your goals.
Your bank or building society might have an in-house stockbroking department, or there might be stock shops affiliated with your bank (although these can also be completely independent). These too offer professionals who can provide you with advice on how to enter the market.
Over recent years a number of online traders have sprung-up, through which you can instantly assess a number of options. Online traders are effectively just a digital version of the services you would receive elsewhere, and have fast become a preferred choice for people who want to want to oversee the process remotely.
Alternatively, you may even be able to buy stocks and shares directly from a company, which is likely to advertise its shares on its website or social media; keep an eye out for any companies in particular that you would like to invest in.
But be advised, entering the stock market can prove an overwhelming prospect. There’s plenty of unique lingo and other strange quirks that can make understanding it all the more difficult.
Advice from a trusted source such as the team at money4dentists becomes essential, we can also help with all your personal financial goals, guide you to better understand and manage your tax, look at your pension and insurance schemes, or even help prepare you for retirement.
So, is now a good time to enter the stock market? The answer really depends on how you approach it. There is never a guarantee that investments will be fruitful, but with the market currently performing very well, there’s a chance that some very smart investments can be made.