When to Invest?
Brian begins at the beginning
by Brian Graney (TMF Panic@aol.com)


ALEXANDRIA, VA (Sept. 28, 1998) --There's an ad floating around the Internet right now that poses the question, "Is this the right time to invest?" Actually, the teaser is a promotion for The Moneypaper and just happened to be featured recently above this very column. But for folks new to investing, that single question often seems about as daunting as the Riddle of the Sphinx.

Here's the situation (insert hypnotic, time-warp music here):

Let's say that you are ready to make the move up from Fool Junior Grade to Fool First Class. The 13 Steps have been read and committed to memory, those pesky credit cards are all paid off, and maybe you've given a little bit of thought to what to do for retirement. Check, check, check. What's next?

A little bit of dedicated research about stocks and investing might not be a bad idea at this point. You might read some good books, find out what all of those stock valuation ratios are all about, form some opinions about a few companies that have caught your eye, and share what you have learned with others. These are all good things to do.

Meanwhile, days pass, weeks sail by, seasons turn, TV sitcoms come and go -- pretty soon, it's months later and still no stocks. Is this what everyone around here means by Foolishness? Is it supposed to take this long to get started on this investing thing? And, more importantly, is there a point to all of this rambling?

What this all boils down to is the following: Take your time when you are getting ready to invest. If you can't tell a balance sheet from a balance beam, then set aside some time to figure out the difference between the two before plunking your money into your first stock. Learn as much as possible about your investment before it actually is your investment. That way, there is much less of a chance that your first investment will also end up being your dumbest investment.

Second verse, same as the first: Take your time. If you're Foolish and want to become an owner in an excellent business for a long time, then there is no rush. Great businesses don't just appear and disappear overnight, of course. And here's a newsflash -- neither do great investors.

I can hear the collective yawn of long-time Fools at this point, but for investing wannabes these things are worth emphasizing (and for the veterans out there, a little reiteration never hurts). Unfortunately, the Wise on Wall Street often tend to gloss over ground-breaking concepts such as "learning." Sure, learning all this investing stuff takes time and perseverance. But, like trays of meat by-products being ground into a high quality sausage, all of your learning will form a solid basis of what kind of investor you want to be. It's a messy process, but it's worth it.

If you are struggling to find your "inner investor," there are lots of places right here at the Fool to seek solace. Take a look at the links in this article -- besides adding some needed bursts of color, they actually lead to some great investing insights. Veteran DRPers are helping newbies along on the Drip Investing - The Basics message board every day. And for more guidance, rookie investors can always look to the Ask a Foolish Question message board for helpful tips on getting going on investing.

On a more personal level, I finally feel ready enough to make my first investment and demand my First Class Fool stripes. It's taken the better part of the last year or so, but I've discovered that the things I value as an investor-to-be just happen to dovetail nicely with the goals and aspirations of the Fool's Drip Portfolio. (This is the daily Drip column, remember?)

In my case, I've responded to the "When to invest?" question that's been knocking around inside my head with a resounding, "I'm ready! Bring on the DRPs!" Later this week, I'll expand a little on why a DRP is great place for new investors like myself to start their investing journeys.

In the meantime, stop trying to answer that "When to invest?" question and start clicking those links!

--Brian Graney

FoolWatch -- It's what's going on at the Fool today.


9/28 Close

Stock Close Change CPB $52 5/8 +2 9/16 INTC $87 -1 5/16 JNJ $80 +2 3/16
Day Month Year History Drip 1.13% 14.18% 14.53% (2.47%) S&P 500 0.38% 9.52% 8.06% 10.23% Nasdaq (0.25%) 16.01% 10.75% 9.12% Last Rec'd Total # Security In At Current 09/02/98 8.027 CPB $52.867 $52.625 09/01/98 9.727 INTC $80.238 $87.000 09/08/98 6.564 JNJ $70.161 $80.000 Last Rec'd Total # Security In At Value Change 09/02/98 8.027 CPB $424.36 $422.42 ($1.94) 09/01/98 9.727 INTC $780.50 $846.28 $65.78 09/08/98 6.564 JNJ $460.54 $525.12 $64.59 Base: $1900.00 Cash: $186.07** Total: $1979.89

The Drip Portfolio has been divided into 81.201 shares with an average purchase price of $23.399 per share.

The portfolio began with $500 on July 28, 1997, adds $100 on the 1st of every month, and the goal is to have $150,000 in stock by August of the year 2017.

**Transactions in progress:
9/21/98: Sent $77 to buy/enroll in MEL.