When buying Exchange Traded Funds (ETFs), the 4-cycle investment approach can help buying them at the right time. I often get the question asked when the time is to buy ETFs to avoid temporary and seasonal fluctuations of capital markets. How can one know whether the current ETF price is high or low at the moment? Will it increase or decrease over the coming weeks? When is the best moment to start investing in ETFs?

When is the best time to buy ETFs?

The answer: It’s quite simple. Rather than investing the entire sum at once, splits the sum into 4 equal parts (25% each) and invest each part every 3 months over the course of one year.

Example: Total investment 10.000 EUR
1 January – First part: 2.500 EUR
1 April – Second part: 2.500 EUR
1 July – Third part: 2.500 EUR
1 October – Last part: 2.500 EUR

Example schedule to buy ETFs:

Performance chart of UBS ETF (LU) MSCI World UCITS ETF (USD) A-dis
Performance chart of UBS ETF (LU) MSCI World UCITS ETF (USD) A-dis (Copyright: justETF.com)

Spreading the planned investment over the course of one year allows for avoiding seasonal and temporary fluctuations. Given that ETF prices do fluctuate, the 4-cycle investment approach reduces the risk of buying at the wrong time and thus diversifies the risk.

And even better: With the 4-cycle investment approach, there is no need to wait with buying your first ETFs. But you can do it today. Like I did back in 2015 when I bought my first ETFs. If you are interested, you can see my investment history.

The first step is always the hardest.

When I first invested in ETFs, I followed the ETF stock price for a few weeks and couldn’t decide when to start investing, being afraid that the price would go down the next day, the next week, the next month. I read about the 4-cycle approach and used it myself (see my investment history). Not only did it give me the confidence that I am not a victim of short-term or seasonal course fluctuations, but it also helped me starting to invest. The first step is always the hardest and the 4-cycle approach helped me get started.
Peter Kaiser