Say you want to get involved in the stock market and you open a stock brokerage account. Say your initial investment is $20,000; what will you do? Many investors will probably invest all or most of it immediately. You sure don't want to miss that gravy train leaving the station for "fabulous-profits-ville" do you?!
Well, if you're a patient investor and you chose wisely, that's okay. But the reality is that investments zig-zag. Sometimes watching investments is like watching water on a stovetop wondering when it's going to boil. Investments tend to go up a little today and then go down a little tomorrow. Sometimes you get in on a Monday and watch as prices plunge the next day. You then get into the "shoulda, coulda, woulda" of the world of investing. "Gee, I should've waited a day or two, then I could have gotten in at a much better price, and then I would've made more money!" What's an investor to do?
The odds are overwhelming: You'll probably never buy something at the exact bottom, and you'll never sell something at the exact top. You can only look at that price of that investment on that day and say "Is it worth it for me to buy now?" Much of the market can be unknowable since you can't read the minds of literally millions of investors both big and small. Don't even try. But who said that investing all of your money in one fell swoop immediately was the right way to go?
In the short term, markets today are more volatile and more irrational than at any time in history. Large financial institutions, governments, hedge funds, and other hefty players are moving huge amounts of money — billions and trillions — in and out of the market at lightning speed. With the advent of globalization, the Internet, and other technology, huge amounts of money can zip around markets and economies at the speed of a mouse-click, 24 hours a day. This is why you should stagger your entry.
If you have $10,000 or more to invest, start off investing a quarter or a third of that and wait a few days or a few weeks. Watch your investment and watch the marketplace for news, events, and announcements. If your investment went down and it is still a good asset (say a stock or an ETF), then consider buying more of it. If it was a great investment when you first bought it, then it's better as you buy it at a bargain price.
Unless you have only a small amount to invest, it's always good to have some investable funds on the sideline — preferably earning interest — while you wait for opportunities.