59. When is the best time to recommend to your client to start their retirement fund?

 

What Is Market Timing?

Market timing is the act of moving investment money in or out of a financial market—or switching funds between asset classes—based on predictive methods. If investors can predict when the market will go up and down, they can make trades to turn that market move into a profit.

(https://www.investopedia.com/terms/m/markettiming.asp)

One of the reason why financial advisors feel the need to time market is because of the of the  "buy low, sell high" mentality, this created an impression that catching the lows is essential to long term investment success, this is a market timing issue

From an advisory perspective this placed our credibility with the client to the test early on in our client relationship, imagine telling the client to invest now because we think the market will rise soon then proven wrong

Trading and investing are two totally different reasons when entering the market, traders are after short-term gains hence the need to time the market while investors are primarily after long-term growth

Investing for retirement is best started early, given a time horizon of at least 10 years or more, market timing issues may become irrelevant

a study was made to identify the main determinant for long-term investment success considering the volatility of the stock market, results shows that a proper asset allocation and regular re-balancing may offset most of the setbacks of market downturns

So to answer the question as to when is the best time to start investing for retirement?

The answer is TODAY for as long as proper allocation is implemented

Simplest rule of thumb would be 60/40 for goals with at least a 10-year time horizon, anything longer, a more aggressive 70/30 or even 80/20 may be suggested

all the best my friends!