Should you invest now or wait?

There never seems to be a shortage of reasons to be cautious about investing. Over recent years, investors have navigated high inflation, rapidly rising then falling interest rates, tariff disputes, conflict in the Middle East and uncertainty about economic growth. More recently, many share markets have recovered strongly from periods of volatility and are again trading near record highs.

For investors considering a new investment, or those thinking about adding to an existing portfolio, this naturally raises an important question, ‘Should you invest now, or wait for a better opportunity?’

It's an understandable concern. After all, nobody wants to commit money to markets only to see values fall shortly afterwards. But while waiting may feel like the safer option, it comes with risks of its own.

Many investors assume that if markets are near record highs, a pullback must be around the corner. The problem is that markets rarely provide a clear signal about when the ‘right’ time to invest has arrived. By the time uncertainty has passed and investors feel comfortable again, markets may have already moved higher.

History shows that periods of strong market performance often occur when investors are least expecting them. Unfortunately, those waiting on the sidelines may miss out on some of these gains.

This highlights one of the biggest challenges facing investors - while it’s easy to see the risks associated with investing today, the risks associated with waiting are often harder to identify.

Looking back over the last two decades, investors have faced no shortage of events that appeared capable of derailing markets. Financial crises, recessions and geopolitical shocks have all tested investor confidence.

At various points, many investors may have believed there was a compelling reason to wait for greater certainty before investing. Yet despite these setbacks, markets have continued to reward patient investors over the long term.

History suggests that trying to predict exactly when markets will rise or fall is extremely difficult, even for experienced investors. Successful investing is often less about identifying the perfect entry point and more about having sufficient time in the market.

Every period of market history has presented investors with reasons to be cautious. Yet despite numerous crises and setbacks, markets have repeatedly demonstrated an ability to recover and move higher over the long term. This chart shows the performance of $100,000 invested in the MSCI All Country World Index since 1998. Source: Bloomberg.

This challenge isn’t limited to first-time investors. Many existing investors find themselves asking a similar question. When markets have risen strongly, it can be uncomfortable investing additional funds. The temptation is often to wait for a pullback before committing. However, if your financial goals, investment timeframe and risk profile haven't changed, delaying a planned investment may simply be another form of market timing.

For long-term investors, remaining focused on their overall strategy rather than short-term market movements can often be a more productive approach.

Importantly, investing doesn't need to be an ‘all or nothing’ decision. For investors concerned about committing a large amount of money at a single point in time, one option is to spread their investment over a period of months through a strategy known as dollar cost averaging.

Rather than investing all available capital immediately, dollar cost averaging involves investing smaller amounts at regular intervals.

For investors concerned about committing a large amount of money at once, the choice isn't simply whether to invest or not invest. There are different ways to put money to work, each with its own trade-offs. 

At the beginning of 2025, investors faced a difficult choice. Following a strong year for markets, some may have questioned whether a downturn was overdue. This chart compares three possible responses: investing $50,000 immediately, investing the same amount progressively over four quarterly instalments, or remaining on the sidelines and waiting until the beginning of 2026 to invest.

Despite a period that included tariff announcements, changing interest rate expectations and heightened geopolitical tensions, both investors who entered the market during 2025 finished ahead of the investor who waited on the sidelines. While the lump-sum investment produced the strongest outcome, the staggered approach also delivered a materially better result than waiting for a more comfortable entry point.

This chart shows the performance of investments in the MSCI All Country World Index. Source: Bloomberg.

The lesson isn’t that markets always rise or that lump-sum investing always wins. Rather, it highlights the challenge of waiting for certainty before investing.

For investors uncomfortable investing a large sum at once, dollar cost averaging can provide a practical middle ground. By investing progressively over time, it can help reduce the emotional pressure associated with trying to identify the ‘perfect’ entry point.

When markets fall, regular investments purchase more units for the same dollar amount. When markets rise, previous investments benefit from the increase in value. 

While dollar cost averaging doesn’t eliminate investment risk, it can help smooth the impact of short-term market fluctuations and give investors greater confidence to participate in markets sooner.

Market movements, interest rates, inflation and geopolitical events are outside any investor's control. 

What investors can control is:

• Having a clear investment strategy
• Maintaining a diversified portfolio
• Investing consistently
• Aligning investments with long-term goals
• Seeking professional advice when needed
• Remaining disciplined during periods of uncertainty.

While the examples in this article focus primarily on share markets to illustrate the challenges of market timing, investors in ANZ Investments’ diversified funds and strategies don’t need to rely on a single market or asset class to achieve their goals. That’s because our diversified offerings combine different sources of return, helping investors stay focused on long-term objectives rather than attempting to predict which asset class is likely to outperform next.

There may never be a perfect time to invest. But successful investing is often less about predicting the next market move and more about having a well-considered plan and the discipline to stick to it. By remaining focused on long-term goals rather than short-term headlines, investors can give themselves the best chance of achieving the outcomes they are seeking.

Whether you're considering making your first investment, adding to an existing portfolio, or simply reviewing your current strategy, one of our financial advisers can help you assess the options available and develop an investment approach that aligns with your objectives, timeframe and tolerance for risk.

To talk to an ANZ Investment Adviser, call 0800 269 238.