When is the best time to invest?

Marie Engen, who writes the Boomer and Echo blog with her son Robb, talks about people who feel they can’t invest in stocks when the markets are hot. They ask, “Is it too late to buy?” and keep their savings in bank deposits at low interest rates.

Here is Marie’s response:

There is a common fear of investing at the top of the market – resulting in your staring at big losses right off the bat.

Of course, there’s always the possibility of investing right before a market downturn. But no one knows for sure when this will occur.

An acquaintance remarked last year that the market was overheating and a correction was surely due shortly. This was when the S&P/TSX Composite Index was around 12,800. Today (as of this writing), it sits at 15,550. In the meantime, he has stayed on the sidelines waiting.

Rather than fretting about when you should make your move, think instead about how long you’re planning to keep the money in the market.

Stocks are a very attractive option for long-term goals and will generally provide the best return on investment.

As the pundits say, time in the market is better than timing the market. You may live a long time, so why dump your stocks when you turn 60 or 65?

You can hold more conservative investments in your retirement years. But you should keep some money in the stock market to preserve your purchasing power.

My investing class starts tonight. Close to 90 people have enrolled, a record number.

When I asked why they signed up, I heard a variety of reasons:

— I want to understand the lingo.
— I want to learn about ETFs (exchange-traded funds).
— I want to be my own financial adviser.
— I want to prepare for the “soap opera” visits with my adviser.
— I want to find out how to reinvest company dividends.
— I want to pay for courses outside Canada in five years.

All these reasons make sense, except maybe the last. Five years is too short a period for your stock market investments to flourish, especially when you come in after a long bull market.

Here is an article I sent to the students from a U.S. blog, 7 Ways Investing Sucks (and why you should do it anyway).

Investing takes work, though you can find couch potato portfolios that demand little time. It’s an essential life skill. I’m glad to see so many people recognize they have to take control.

My interview with Mint.com

I am a fan of Mint’s personal finance website, which came to Canada a few years ago. So I happily agreed to an interview and a link on my blog roll.

Here’s an excerpt from the article, where I express views that won’t surprise my faithful readers.

What industries do you think are the biggest offenders when it comes to unfair practices toward consumers?

Telecom troubles usually top the list. Canadians have three big wireless providers, which charge high prices and bind customers to unfair contracts. Complaints about phone, Internet and TV service keep me busy every day.

Another big area is financial services – everything from banking to credit to investing. We have a few large banks in Canada which like to say they’re on the consumer’s side. But their practices are often designed to maximize profits and favour shareholders.

What are the most common consumer frustrations, concerns or questions your readers come to you with?

Consumers are frustrated by how much energy it takes to reach large companies. And when companies settle a dispute, they don’t always compensate clients for the time spent pursuing complaints. So I go to bat for my readers to get them extra concessions.

Contracts can be confusing when written in legalese and laid out in a font size too small to read. Many customers don’t check their contracts, but trust what they are told by salespeople. That leads to heartache when a company denies a claim as based on hearsay.

If you wonder about using Mint.com to track your finances, here are a few reviews:

Investor Junkie blog: Likes the site very much, but wishes there was more investing information. It’s a weakness.

PC Magazine: Best tool for managing personal finances. The fact that it’s free seals the deal.

Young and Thrifty blog: Loved the site, but was worried about online hackers and broke up the relationship.

Moneysense magazine: Be careful. Using a third-party financial aggregator can violate your security guarantee with your bank.