Reluctant to Invest in a Volatile Market? Why a Regular Savings Plan, and Dollar Cost Averaging, May Be Your Answer:
Whether your financial dream is to have sufficient funds for your retirement, your child’s university education, your dream wedding and house – take comfort knowing that a disciplined investing approach with a regular savings plan can help you in a powerful way. A regular savings plan helps instill financial discipline as you are forced to save on a monthly basis.
The basic idea of investing well is simple: buy when the market is low and sell when it’s high. However, even the most sophisticated, experienced investors have a hard time trying to perform such a feat consistently. This is because investment markets tend to be volatile – rising and falling suddenly for reasons which are often unexpected. It is this volatility, though, which also creates the potential for returns. By taking a disciplined approach to how you invest, you can make volatility work for you, ride out periods of poor performance, and achieve smoother returns over the long run.
Instead of investing all your money at once, try a steady approach, investing a set amount over a set period. This way of investing is known as Dollar Cost-Averaging and is a fundamental feature of regular savings plans. By using this method, you will be able to turn market volatility to your favor by harnessing the power of this simple, yet highly effective investing principle.