I think you'll agree; 2016 has already been a crazy year for investors.
First, we watched the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) fall dramatically in what was the worst start to a year in history.
It rebounded sometime during February, giving us plenty of reasons to become cheerful…
But it has since retreated once again.
It's ended lower in six of the last eight sessions – falling more than 1% on four occasions, including 1.4% on Tuesday – with the volatility likely wearing thin on some investors.
Unfortunately, that's the nature of the share market.
It's rarely smooth sailing and even the slightest bit of uncertainty can be enough to unnerve some investors.
The fact that much of that uncertainty has surrounded some of the country's biggest companies isn't helping…
The banks have run into a brick wall, as far as the market is concerned, with all four still sitting firmly in official 'bear territory'…
Woolworths Limited (ASX: WOW) is in the doghouse as well, with plenty of uncertainty surrounding its shares…
Heck, even Telstra Corporation Ltd (ASX: TLS) shares have taken a dive over the last 12 months.
They've fallen from a 12-month high of $6.53 to just $5.26 today.
Unless you can travel through time (in which case, we'd probably consider hiring you!), there's no way of knowing when the market volatility will end, and where share prices will be when it does.
Of course, share prices could rise considerably from here, in which case now could be the perfect time to invest. I'll get to that in a moment…
But first, here are three reasons why some investors will stick to the sidelines…
1. If volatility keeps you awake at night
Shares can move up or down for any number of reasons – or for no reason at all!
If a little bit of volatility keeps you awake at night, and if you can't fathom losing a few percent of your investment wealth within a short space of time, then, sorry to say it, but investing in shares mightn't be for you…
2. If you're likely to need the money in the short-term…
In his famous book, The Intelligent Investor, Benjamin Graham said that the share market is a voting machine in the short run but a weighing machine in the long-run.
No matter the quality of the business or its worth, its shares can still drop in price for no good reason – at least in the short-term.
But when we invest, we don't buy a three-symbol ticker code that gets bought and sold each day on the share market…
What we're really doing is buying a stake in a business that we should be comfortable holding for an extended period of time – ideally three to five years (or even longer!).
If you're likely to need your cash before that, then there's a chance the investment won't play out to its full potential and you may lose money by withdrawing the funds any sooner.
3. The market could have further to fall
This is pure speculation. After all, no one knows for certain where the share market will go today, tomorrow, or even next year.
Likewise, no one knows what will happen to China…
Or what the consequences of a falling oil price will be…
Or if Australia and New Zealand Banking Group's (ASX: ANZ) recent announcement regarding bad debt charges really is the start of an industry-wide trend.
Indeed, there are more reasons than those listed above that will cause investors to avoid shares…
But the truth is, there are always reasons to avoid the share market!
The share market is a volatile beast. It always has been, and it always will be.
That's one of the primary reasons why shares have outperformed almost every other major asset class so convincingly over the decades.
The greater the risk, the greater the potential reward.
It mightn't play out that way in the short-term, but the odds are most definitely in your favour if you employ a long-term outlook.
That brings me to the first reason why now could be a great time to buy…
1. Because the market could also be near the bottom
The market has been hit hard over the last 12 months, and even fell into official "bear territory" earlier in the year – defined as a fall of 20% from its peak.
Many investors sell their shares in a panic during such a scare, while even more remain on the sidelines – unsure what their next move should be.
Unfortunately, it is those two groups of investors that often miss the subsequent rally that can follow a market dive.
Just ask those investors who were extremely bearish on shares during the depths of the Global Financial Crisis.
They're the same ones who have likely missed out on one of the greatest bull markets of all time!
Indeed, the market has rebounded from the low it hit in February, and could be set to climb even higher. The investors who are buying shares now will be the ones cheering if that happens.
2. Because interest rates are staying low
The RBA left interest rates on hold at 2% on Tuesday, but some economists think a cut could be announced as soon as next month…
In fact, the ASX's RBA Rate Indicator shows a 33% chance of that happening!
Many also suggest they'll fall as low as 1.5% by the end of the year, partly thanks to the rallying Australian dollar.
Regardless of whether or not that happens, however, there is a very thin chance of a rate hike in the foreseeable future.
That means that interest rates are staying low. And the longer interest rates stay low, the more attractive shares – particularly those offering solid dividend yields – become.
3. Because there are bargains to be had
No, just because the S&P/ASX 200 has fallen from its high doesn't mean thatevery share on the market is a bargain.
For instance, you won't see me be buying shares in Commonwealth Bank of Australia (ASX: CBA) or Woolworths just yet…
Nor will you find me ploughing my money into BHP Billiton Limited (ASX: BHP) or anywhere else in the resources industry.
But elsewhere, there are a number of high-quality businesses that are trading at what seem like very reasonable prices right now.
Many have the potential to generate great capital returns, with solid dividend yields on offer as well.
