In light of an expected global recession, is this a good time to buy financial shares?

The expected global recession and the fiscal tightening policies pursued by all the central banks of the major countries could frighten investors in the stock markets.

But investors always try to answer this question.

Nobody wants to buy when prices hit a peak, and investing in a downturn can be more profitable, but is it possible to tell if the worst is over?

Or is it that more losses haven't happened yet?

So how do you evaluate whether it is a good time to buy stocks and when to wait for a market pullback?

American writer Adam Levy wrote a report to answer this question on the investment site "The Motly Fool", and his response was: "The best answer is that you don't."

Both passive index fund investors and individual equity investors are likely to be better off constantly buying stocks and ignoring the daily ups and downs of the market.

Stock markets are looking at the expected future profits, and profits tend to rise in the long term

"It is always better for retail equity investors to continue to ignore the daily ups and downs of the market," the writer says.

And if you are looking to invest for the future -5 years at least - this is the time more than ever to buy stocks.

Despite recession fears caused by two consecutive quarters of negative GDP growth in the US during the first half of 2022, it is important to remember that the market is looking ahead.

Stock markets look forward to expected future profits, and profits tend to rise in the long run.

Of course, there are still good stocks to buy amid the recession.

The writer stresses that if you invest consistently over time and put more money into your investments - every month or so - you will end up with a correction or a stock market crash.

Of course, it's not worth planning for the unpredictable, when the crash in stock prices will occur.

A longer investment period may mean an increase in the odds of making a profit, but it also means an increase in the risk

Writer Peter Coe - in this report published by the American newspaper "New York Times" - in his answer to whether this is the right time to buy shares and when to wait for a decline in the market?

The conventional wisdom about investing says that as people get older they should reduce their financial assets on the stock exchange.

One of the justifications given in this regard is that stocks will surely increase in value in the long run, but in the short term they are always fluctuating and volatile, so if you are old, you do not have enough time to compensate for your losses in the event of a setback.

The writer also argues that the belief that the value of stocks will surely rise in the long run, is not necessarily true.

It can be recognized that a longer investment period may mean an increase in the possibilities of achieving profits, but it also means an increase in the risks.

This investment in the stock market can be thought of as driving a car.

Statistically, the odds of experiencing an accident within 5 years are much greater than the odds of experiencing it within 5 months.

These risks, which are no less influential than opportunities and gains, make the writer confirm that the intuitions that are transmitted from some financial advisors may not stand up to scrutiny, or when they are put to the test.

So Lawrence Kotlikoff, professor of economics at Boston University, calls on investors and their advisors to pay more attention to the studies and principles of leading economists like Paul Samuelson.

In a book published this week, Kotlikoff says, "Either we, economics professors, misunderstood the matter, and lost an entire century of research on savings, insurance and investment portfolios, and the Nobel Committee awarded this great prize to some economists by mistake, or the financial planning sector needs to rethink. Take seriously the theories and advice that are taught and applied.

Kotlikoff in his book, Money Magic: An Economist's Secrets to More Money, Less Risk, and a Better Life, sees the ideal planning for investing in the stock exchange. It consists in allocating a large part of the funds to this sector during the youth period, then gradually reducing this activity in the years preceding and following the date of retirement, and then returning to the investment to rise again at a later stage after a period of retirement.

As for the theoretical explanation for this advice of entering aggressively into stocks in the young years, it is not that the value of stocks will surely rise after a long time, but because the real capital of young people is human wealth, that is, the energy with which they live and their ability to strive and earn money .

For people with a stable job, this capital is like a bond, as it can be counted on to secure regular income in the future.

In addition, when young people lose their equity investments, they have enough time to intensify their efforts and accumulate capital to repeat the experience.