Easy, when the markets are at a low point and are just about to rise.

However, truth be told, it is a near impossible task to try and time the markets. Without being able to see into the future there is no telling when the time is right. You can look back and know when you would have liked to invest but without the benefit of hindsight it is often an educated guess when we invest. Even good fund managers avoid trying to catch the top or bottom of a market.

But this leaves us with a quandary, particularly at a time when we are expecting volatility but not sure when this will happen and how much there will be. Do we put off investing until the potential volatility has passed, or do we dive in and invest now as you never know it may never happen and if it does it may not be as bad as expected.

There is a real argument that if you have time on your side you are in a better position to ride out any storm and therefore the short-term volatility you are expecting may not be an issue in the longer term.

However, should you wish to hedge your bets you could spread your investment over a period of time rather than investing all in one go. This could then afford you the potential benefit of what is known as “pound cost averaging”.

By paying in a monthly amount for example you will be buying less units when the markets are high and more when they are low. In a rising market this would not be an ideal, but if the markets are falling then this would tend to mean more units bought at a lower price. When the markets recover this will then boost performance.

Conversely if the markets are on the rise then you may have been better placed to have invested all the funds in the first instance.

I believe that time in is everything and not timing. Although the benefit of pound cost averaging should not be ignored and entering the market at the “right time” would be ideal, if you have a significant period of time to invest for and are not needing to access all the funds on a set date, then you should be able to ride out any medium-term volatility.

Kristina Bailey Dip FA CeMAP

This information is provided strictly for general consideration only. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case. Investments may fall as well as rise and you may not get back the full amount