Deutsche Bank Forecasts Recession

Adobe Stock

Deutsche Bank warned the US Federal Reserve would push the economy into a recession. Is now the time to invest, or should you wait? The experts argue the market is never truly stable, and here’s what matters.

Economic uncertainty: Is it too risky to invest now?

On Tuesday, Deutsche Bank warned that the Federal Reserve’s fight to stave off inflation by raising interest rates and tightening monetary policies will hurt the United States into a recession beginning late next year, CNN reported.

Even though the market has fluctuated over the past couple of weeks, the S&P 500 rebounded roughly 9 percent in three weeks, nearly recovering its losses from the year, the Motley Fool reported.

However, many fear that soaring inflation, fuel prices, supply chain issues, and the ongoing war in Ukraine could result in more market volatility.

Many wonder if it might be best to wait on making new investments?

Experts argue market never truly stable, invest now

Day-to-day, the market is never truly stable, the Motley Fool argues. They further state that even during strong economic times, the market can fluctuate for days or weeks.

The fact of the matter is that since the year 2000, the S&P 500 has almost been continually upward, especially since 2009. While there have been minor dips, the performance has moved from somewhere in the -60% category to its current level of +209.4 percent symbol.

Focus on a long term strategy

Investors should be in it for the long term and not worry about market fluctuations or up-and-down stock prices. Over the long run, experts say, those highs and lows will average out. They advocate for staying put with your investments, even when the market goes down, and simply riding out the storm as prices eventually rebound.

Warren Buffett has advised that people focus on solid companies they like and want to own. This is good advice as, historically, strong companies have shown a better chance of pulling through tough economic times. Therefore, advisers recommend filling your portfolio with solid long-term stocks that are likely to recover if the market takes a dip.

Dollar-cost averaging strategy

Experts recommend focusing on a strategy called dollar-cost averaging. This strategy involves setting aside a set amount of money on a regular basis. That basis can be weekly, monthly or quarterly. The bottom line is to focus on a certain amount you will accumulate for investing.

Because the market fluctuates, using this strategy means that sometimes you will purchase stock during a thriving market when they are at their highest. Other times, during a market slump, you’ll buy stocks when prices hit rock bottom.

The important thing to consider here is how this strategy works over the long run. Over time, with highs and lows, they will average out in the conglomerate, and it will not matter how the market was performing when you purchased stocks. In other words, you will have spent the same amount of money as prices equal one another out.

The most important thing is to keep investing and stay investing over the long haul to allow increasing value and compounding interest to maximize your gains.