Is this January the perfect moment to jump into the world of investing? Many of us dream of investing, yet we often delay, waiting for the 'ideal' time. Years can slip by, as we hold out for that elusive perfect moment. But is there really such a thing?
I get it. Successful investing means buying assets for less than their true worth. No one wants to overpay.
However, the market's signals can be confusing. On one hand, the economy might seem sluggish. But, in contrast, the FTSE 100, a key index of leading British shares, recently hit a new all-time high.
The Perils of Market Timing
It's helpful to pause and ask: what does the 'right time' to start investing actually look like?
Part of the answer is personal. Does your financial situation allow you to invest, even a small amount? Have you defined your investment goals?
Also, have you learned the basics of valuing shares and diversifying your portfolio to reduce risk?
But here's where it gets controversial: there might not be a single 'best' or 'worst' time to invest. It often depends on what you invest in.
Many try to time the market, predicting future movements. But that's always a guess.
When I say the right time depends on your investments, it's because shares don't move in lockstep. Even if the overall market seems expensive, individual shares can be bargains. Conversely, some shares can be overpriced even after a market crash.
That's why I prefer buying individual shares (as part of a diversified portfolio) rather than index trackers.
A Share to Consider: M&G
Right now, one share to consider is FTSE 100 asset manager M&G. The asset management market is large and likely to remain so. The scale of these operations means even modest commissions can generate substantial income.
With a strong brand, extensive experience, and millions of customers across many markets, M&G has proven its ability to generate significant cash.
This allows it to offer a generous dividend. The current yield is already 6.9% — more than double the FTSE 100 average — and the company aims to increase its dividend per share annually.
But here's the catch... Will M&G succeed? Dividends are never guaranteed. One concern is that policyholders might withdraw more funds than they invest, potentially impacting cash generation.
From a long-term perspective, however, I'm optimistic about M&G's future.
Getting Ready to Invest
Of course, before investing, you'll need a platform. This could be a share dealing account, a Stocks and Shares ISA, or a trading app. Then, after funding your chosen vehicle, you can start buying shares.
What do you think? Are you considering investing this January? Do you agree or disagree with the points made? Share your thoughts in the comments below!
