When you put money in an investment, waiting for it to start making money can be hard. This is especially true if you’re new to investing and have no basis of comparison for the expected time.
Of course, there’s a chance that this investment won’t actually give you the returns that you need. If you wait too long to react, you may put your money goal in jeopardy. On the other hand, pulling your money out unnecessarily might not be the right response, especially if the investment could have recovered and gained enough within your time horizon.
So, how long should you wait for your investment to start earning? A day or two, a month, three months or longer?
The short answer is that there isn’t a one-size-fits-all minimum time period. After all, investments don’t always earn money right away. Some take longer than others, especially those which give dividends (which are often done on a set schedule).
The longer answer is that it all depends on your goal and time horizon.
Check your situation
Since it might take a while to see growth when you start an investment, you shouldn’t start worrying right away. When it started earning doesn’t matter nearly as much as how much it actually earned for you until you had to take your money out.
This doesn’t mean, however, that you should wait forever. To know when you should start considering alternative uses for your money (like moving it to a different investment product), check your goal and time horizon.
If you find that your investment’s growth is slow enough to make it look like you won’t be able to earn the right amount (goal) by the time you need it (time horizon), then look at other products to see where your money might be better placed.
Don’t forget that in investing, the ending matters more than the beginning. Avoiding knee-jerk reactions and following your strategy will go a long way in helping you have a happy ending.