Tomorrow looks pretty good, too.
People often ask me whether now is a good time to buy shares. They assume that, as an investment journalist, I will have some insight into the matter.
And in the early years, I tried to deliver a sensible answer. I would throw out some recent trade numbers, highlight a couple of trends and counter trends, toss in a brace of analyst quotes, then dazzle them with my sage conclusion. Maybe.
The truth is, I didn't know. And nothing has changed. I still don't know.
Maybe, baby
So is now a good to time to buy shares? Well, US GDP figures have just surprised on the upside, but German manufacturing is shrinking. Emerging markets face a hard landing, but China and Brazil are lining up lavish stimulus packages. Some analysts claim stocks have further scope for growth, others predict a perfect storm in 2013.
So should you buy? Maybe.
Perfect day
From time to time, there will be a really great moment to buy shares. It may only happen a few times in your investment life. And when it does, you will almost certainly miss it.
The perfect moment that springs to mind is March 2009, in the dark days of the credit crunch, when the FTSE 100 (UKX) brushed 3,500.
Some lucky people did buy shares, and fortunes were made. You probably bought a few bits and pieces yourself. I did -- I just wish I'd been brave enough to buy more.
Shocked and awed
It is easy to forget how shell-shocked everybody was at the time. Buying shares seemed a crazy thing to do, far better to spend your money on tinned food, bottled water and ammo.
When markets are down and shares are cheap, most investors are too paralysed with fear to take advantage. The perfect moment passes.
Similarly, when markets are flying, they are giddy with greed, and get their timing wrong again. It takes a strong-minded investor to buck either trend.
Annuity angst
Delaying financial decisions in the hope that events will move your way is dangerous. Many recently retired investors have done this, by postponing their annuity purchase in the hope that today's dismal rates will improve. Instead, they have simply got worse and worse.
There is another danger to delaying, highlighted by pension specialists MGM Advantage. It takes the case of a 65-year old man with a £100,000 pension. If he bought his annuity today, he would get £5,901 a year. If he delayed two years, until age 67, he would get £6,165, assuming all other factors unchanged.
That's an extra £264 a year. The problem is, he would have sacrificed two years' income, worth £11,802 in total. It will take him 44 years to recoup that lost money. At this age, his life expectancy is just 21 years.
Waiting for that perfect moment, or at least a marginally better moment, while understandable, has horribly backfired. Procrastination is the thief of wealth.
Good, bad, whatever
You can apply that argument to buying shares. Should you buy now? Maybe. There are arguments both ways, and I've listed a fraction of them above.
If you keep waiting for the perfect moment, you will never buy any shares. Even if that moment arrives, as it did in March 2009, it will look like the worst possible time to buy shares, and you'll fluff it.
You have to accept that sometimes you will buy shares on a good day, and sometimes you will buy on a bad day. The real danger is failing to buy at all.
Present perfect
Like that man with his annuity, why would you wait to buy insurer Aviva (LSE: AV)? By delaying, you are passing over an income worth 8% a year, thanks to its dividend. Or BAE Systems (LSE: BAE), which pays you 6% a year to hold the stock, twice as much as a best buy savings account, with any growth on top. Or SSE (LSE: SSE) (5.8%), National Grid (LSE: NG) (5.7%), Standard Life (LSE: SL) (5.3%), L&G (LSE: LGEN) and Vodafone (LSE: VOD) (both 5.2%).
If you knew for sure that markets will fall and those shares will get cheaper, then you should wait. But as recent years have confirmed, nobody knows anything.
Nobody knows whether now is a good or bad time to buy the stocks. But in my experience, there is never a bad time to bank a 5% dividend.
Some people spend their investment lives looking for the perfect time to buy shares. They should give it up. The perfect time to buy shares is today.
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> Harvey owns Aviva and Vodafone. He doesn't own any other share mentioned in this article.
