The absolute best time to start investing would be the day you turned 18 and could legally open a brokerage account. Really, it could be the day you were born if a savvy adult started an account for you.
The second-best time to start investing is right now. That’s always true because you want to maximize the time you’re in the market. But right now is an even better time to start investing or add to your nest egg.
In his 1986 chairman’s letter to investors, Warren Buffett noted, “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” Well, according to the Fear & Greed Index, 2025 is the time for us to be greedy.
The Index has only been able to get out of fear territory for just six days this year. And when it did, as soon as the index crept into the low neutral sentiment it immediately retreated.
Some people use the CBOE Volatility Index (VIX) to measure market sentiment. The VIX measures volatility by tracking the 30-day options contracts of the S&P 500 stocks. A higher VIX suggests there is more volatility or fear in the market.
I like the Fear & Greed Index because it combines seven indicators that measure different market behaviors. The VIX is one of that group of seven.
Why Buffett’s Advice Makes Mathematical Sense
It always surprises me how people come to me for stock advice when the markets are ripping higher. They feel like they are being left behind and want to jump on the runaway train. That’s the worst thing you can do.
In the same chairman’s letter, Buffett also said:
“What could be more exhilarating than to participate in a bull market in which the rewards to owners
of businesses become gloriously uncoupled from the plodding performances of the businesses
themselves. Unfortunately, however, stocks can’t outperform businesses indefinitely.”
Buy when others are fearful and sell when stocks uncouple from their business and start to outperform. It’s solid advice for buying low and selling high. Joining the herd can result in the exact opposite.
Yes, following Buffett’s advice will take a little bit of practice. It’s not easy to be greedy when the headlines are screaming fear or the markets are flashing red. But it’s really one of the best ways to lock in a great entry price on your favorite stocks.
No Time Like the Present
You don’t need to try and time the bottom to be successful. The only surefire way to do that is in the rearview. A great entry price is a great entry price even if you miss the very bottom of the market.
Dividend investing is a long-term strategy. We want to use time in the market and market volatility to our advantage. During the entire time you hold a stock you can continue to add on drops and sell when shares go up, even if you aren’t ready to sell the whole position.
Now is the time to get your money into the market. Every pullback is an opportunity for future wealth to be made. No matter if you have $50 or 10 grand, get that money working for you.
In our Yield Shark open portfolio, we have stocks marked buy ranging from $5.04 to $106.09 a share across various industries. If you’re not ready to try out Yield Shark, I’ve given a handful of my favorites here in Dividend Digest over the years.
Even if you don’t take my specific stock advice, I hope you will listen to one of the most successful investors ever and find your greedy side in this fearful time.
For more income, now and in the future,
Kelly Green
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