Times You Could Stop Investing In The Stock Market – Temporarily

Investment might be a continuous process, but there are indeed times when you will not be able to invest – and it is absolutely fine!

Part of the process of being human is understanding that sometimes things do not work as we expect it. The idealistic investor is one who starts investing from a tender youthful age, keeps investing to meet his or her investment needs based on his or her stage in life and age-based investment objectives.

This investor will invest for growth, then invest for dividends or for retirement income, amass good wealth and enjoy the benefits happily ever after. Asides the fact that the riskiness of the investment journey and its unpredictability, there is a simple truth that you might not always be predisposed to invest.

Investment might be a continuous process, but there are indeed times when you will not be able to invest – and it is absolutely fine! Below are some of those situations that could threaten your financial stability and make you take a much-needed break off investing.

When Paying Off Debt

Trying to invest money when your creditors are calling is one of the most distracting and futile things to do. Where you need to service debt, it might not be a good time to invest – and for good reasons.

The first reason is apparent as you cannot ideally be tying money down when there’s a pressing need for it. However, the second and most important reason is that if you try to invest when you have a debt to pay off, you will most likely put the investment under the pressure of yielding returns for you to help service that debt.

This pressure, more often than not, leads investors to make poor investment decisions or to simply be impatient.

Where Crisis Occurs

We never wish for any form of crisis to occur, but they often do. It could be the death of a close relative, an accident or an issue that threatens your principal source of income or business.

Whatever it is, it is only natural to focus on getting out safe before going back to the investment game. However, in the case where a contingency or emergency fund exists like a good insurance plan, then there will be no need to pay out of pocket expenses for emergencies.

Where You Need To Build An Emergency Fund

Following closely from the last point, an emergency fund certainly comes in handy. However, you cannot build an emergency fund by investing in the stock market as a result of the risks associated with it.

Where you need to build an emergency fund, it is okay to temporarily pause or at least reduce how much of your income goes into investment in the stock market. It might be a fund for your child who will soon need to go to college or a fund to secure a home.

For this, low-risk investment securities like treasury bills or government bonds will be the best options to explore.

The keyword, however, is temporary. The stock market is one with amazing opportunities to build wealth and grow the nation’s economy that has been left untapped. It will be a huge waste not to tap into it.

Written by Lawretta Egba.