Everyone knows that the stock market is down this year, and it’s not just because there’s been a lot of sell-offs. The fact is, the market is in some type of decline for two years in a row, and it’s getting harder and harder to find buyers for all the cheap shares out there. That’s why you should look into buying your own shares — as an investment, you can do it right now. If you’re reading this article, chances are you already know that investing your money is difficult.
Whether you’ve heard about it from friends or family, or if you’re the first to do it yourself, learning how to invest your own money can be hard. While there are plenty of tutorials online that will help give you the strategy tips you need to start investing your money properly. Often times these tutorials leave people feeling more confused than motivated. That’s why in this article we will be sharing investment strategies and why we believe that dollar-cost averaging is the best way to invest your money.
What’s the deal with stock market fluctuations?
If you’re feeling a little confused about how to invest your money, or if you’re just wondering how the market is doing at this point in time, the stock market may have something to do with it. For example, if you’re reading this article, you’re probably in the early stages of investing your own money. It’s likely that you’re not yet at the point in life where you have enough money to purchase a house or start a small business. Instead, you’re likely in the early stages of saving money so that you can start bringing your investments to fruition.
Buy low, sell high. Most people think that they can take advantage of the momentum in the stock market or real estate market by buying a certain stock or property and waiting to sell it when the price increases. But in reality, this strategy is rarely successful. Most people will buy at the top of a bull market and should be selling at the bottom of a bear market. In addition, due to human emotions and the inability to predict the long-term movement of asset prices even though they may be aware that they are making their decisions based on emotions rather than facts, they turn out to be wrong in most cases.
Rule no.1 of investing is to never time the market. Ken Fisher’s famous quote “time in the market beats timing the market”‘, investing long-term beats investing short-term 99% of the time. However, it is not easy to want to stay invested when everyone wants to call the market bottom first before investing. Which is almost impossible, that’s why people use the dollar-cost averaging strategy.
Why Dollar-cost averaging is the best strategy?
What is the best way to build wealth early? When it comes to investing, there are a number of tips and strategies that will help you get more out of every dollar you put toward the fund. However, not many strategies can beat dollar-cost averaging. Dollar-cost averaging is a wise investment strategy because it’s designed to reduce risk and limit losses. You can never time the market perfectly.
By investing regularly, you buy shares when the market is down, which means you get more shares for your money. In those years when the stock market rises significantly, this strategy allows you to ride the wave without blowing out your portfolio. Similarly, if there happen to be some bad times in the stock market — when prices are falling — dollar cost averaging helps you limit your downside losses and keep buying shares even as they drop.
Who should be using DCA
Any investor who wants to take advantage of the benefits of dollar-cost averaging can do so. These benefits include a potentially lower average cost, automatic investing at regular intervals, and a method that relieves them of the stress of making purchase decisions under pressure when the market is volatile. Dollar-cost averaging may be especially beneficial to new investors who lack the experience or skill to determine the best times to buy.
How to invest your own money
If you are new to investing, I highly recommend you start reading my Beginner’s Guide on how to invest in stocks. Fortunately, the majority of people who want to invest their own money can end up doing so easily by investing in the stock market using stock brokerage apps such as Tiger, Webull, or MooMoo. So do click on the links to get a referral bonus if you have not signed up and get started with your investment journey. This is a good thing, as it means you don’t have to put up with the high prices of many of these investments and you don’t have to worry about paying for them as you wait for the market to get back to normal. As smart investors always say, it is better to keep your investment boring.
