One of the best ways to save is to invest a regular sum into the markets at a regular interval over an extended period of time. This approach is often called dollar cost averaging, which is a simple but brilliant self regulating means of investing in equity markets especially. It has the following benefits:
It does not require a large amount of money to get started.
It ties in with your cash flow.
It takes advantage of market volatility.
When prices are high, less units are purchased.
When prices are low, more units are purchased.
It effectively reduces risk over time.
To be effective, dollar cost averaging must be done over an extended period of time, and the investor should not stop due to difficult market conditions. In fact, it is human nature to want to stop investing when market sentiment is poor and prices low, and to start or increase investments when markets are strong and sentiment is very positive. In fact, investors should be doing exactly the opposite!
Saving a regular amount each month, effectively forces you to buy into the markets when they are low.
If you would like to learn more about Dollar Cost Averaging contact us here.
In order to determine the best solution for you, meet with one of our advisers, who will asses your current situation, or issue that you want addressed, and will construct an effective affordable solution specially tailored to fit your needs.