Should Rahm invest in the stock market when he'll be returning to his home country in a few years? Dave has some good information and sound investing advice for him.
QUESTION: Rahm will be returning to his home country soon, after completing his master’s degree. Since his time in America is short, and he has heard rumors about investing, he asks Dave if investing in the stock market while he’s here would be a good idea.
ANSWER: If someone could accurately predict the stock market with certainty, that person would be a multi-bazillionaire. There are always negative and positive articles floating around. I wouldn’t avoid stock market investing based on one ridiculous article you read.
In your situation, you may not want to invest in the stock market right now. History says you stand a fair chance of coming out with less than you put in if you don’t leave the money invested in the stock market alone for at least five years. Market fluctuations aren’t a big problem if you’re going to put your money in there and leave it alone for 20 years or more. But three to five years? The historical data says you’ve got a reasonable chance of losing money.
I probably wouldn’t invest if you’re going to be gone in five years or less. Instead, when you’re settled and have a career in your home country, I’d advise looking into how you can invest there. You might even want to do some research, and see if you can begin investing there now.