YOUR MONEY: Invest now, or keep my eye on the US economy?

Question: 

I’ve been holding back on investing R36,000 in my tax-free savings account for 2024. I’m concerned about the US market — it seems to have taken a knock recently. Should I hold back until it settles? Should I go for a world index with this money, or are your experts treading lightly at this stage?

— A Fat Wallet Facebook community member

Answer:

Timing the market is pretty much impossible. And even after the recent wobbles, US markets are still up more than 10% for the year so far.

I would add that as tax-free money is really for the long term — many decades of long term — 2024 really won’t matter when you start to spend it in retirement. Even the collapse of 2008 is hardly visible on the charts.

Perhaps more important is that there is always something to worry about in markets. If we let that worry stop us from investing, we’d always just be in cash.

Two last thoughts. At least deposit the annual R36,000 in your tax-free account where you can. If nothing else, invest in an interest-bearing ETF to get some return. And if you’re simply too stressed to invest it as a lump sum, average it over a few months or more.

— Simon Brown, Just One Lap

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