When’s the best time to invest? Some people say it’s when the market is low. For others, it’s when they have money to spare after a pay raise, an inheritance, or a big tax refund. But Associate Portfolio Manager Apurva Parashar from Alitis Investment Counsel recommends a different strategy.
“As Portfolio Managers, we always champion the idea of ‘time in the market’ over trying to ‘time the market,’” she says. That means the best time to invest is as early as you can, even if it’s only a small amount.
People in their 20s, 30s and 40s often overlook retirement planning — other expenses may feel more urgent, and many people assume they’ll have more time and money later. But there are two major benefits to start saving early. First, you’ll form good financial habits. Second, you’ll see dramatic benefits from compounding interest.
“Compound interest on long term investments means you are earning interest on your principal investment and also on previous interest — you can think of this as ‘interest on interest.’ It means that even small investments can grow significantly if given enough time,” says Harrison Brown, also an Associate Portfolio Manager at Alitis.
The benefits of investing a small amount on a regular basis
- Build good habits. “My clients who’ve stuck with this system for decades gradually changed their saving and spending habits. Even with a $2 million portfolio, they keep those good habits in place,” Parashar says.
- Take the emotion out of investing. “When you make monthly contributions, you’ll catch the highs and lows of the market, and if you stick with the process, you’ll reach your investment goals. It’s a concept called dollar cost averaging,” Brown says.
Tips for young investors
It can be intimidating to meet with a Portfolio Manager, but you don’t need a large amount of money or knowledge to get started.
“We pride ourselves on being approachable. You don’t need to have a cheque in hand to start the conversation,” Parashar says. “Sometimes shame about a previous poor investment prevents people from scheduling a meeting. But we’re much more interested in your attitude toward investing now, rather than what you’ve done in the past.”
You may have friends or co-workers who are proud to invest independently — and they’re probably proud of their low fees. But low fees are only part of the story.
“The difference between high and low fees is usually only a fraction of a percent, which isn’t significant when your return is seven to 10 per cent. A Portfolio Manager brings a lot of extra value, and not just in your investments’ performance,” says Brown, who volunteers with the Junior Achievement program, teaching young people financial literacy. “Portfolio Managers will take the time to understand your unique situation, family, and risk tolerance and use that information to guide you to help you focus on your long-term goals. Our strong client relationships and transparent approach coupled with our investment philosophy and process result in a customized experience.”
Schedule a no-obligation, complimentary meeting with a Portfolio Manager today. Find Alitis Investment Counsel in Campbell River at 101-909 Island Highway, in the Comox Valley at 103-695 Aspen Rd., in Victoria at 1480 Fort St., and online at alitis.ca. For more information, call 250-287-4933 or email info@alitis.ca.