It's no secret that the market goes UP...the market, goes DOWN. That's the basics of Investing 101.
For many of us the shape of the market day to day has about as much influence on our lives as the time of the tides that day. But for investors - especially first time investors - it can be a rollercoaster of heart racing highs and stomach churning lows. Every movement is being carefully reviewed and if it turns down then investors with itchy feet jump out.
If you know the benefits of investing, how can you avoid the stress of putting your hard earned money into the market?
Financial planners and investors are quite clear on the subject. New investors should not make an investment unless they are going to let it sit at least 5 to 7 years - the longer the better.
Why?
Well, the economy DOES move up and down, but we have never seen it bottom out (and if it did - well, you'd have much bigger concerns than your investment).
By selecting a diversified portfolio, such as a mutual fund, you can usually base your prediction on past activity and you'll see that in any 7-15 year period the investor always came out with more than he put in.
How do you take advantage of that? When should you invest?
Well, if shares were being sold for $10 each and you had invested $100 you would have purchased 10 shares. Now, if that is your whole investment you would be very upset if the value went down to $5, wouldn't you? Now your stock is worth $50. What would you do? Sell before it goes lower and loose $50?
Using the 'Cost Averaging' technique:
Cost averaging means you continue to put the same amount of investment into the market regularly - preferably every month. Now if you did that you would have invested another $100. At $5 a share you would buy 20 shares. Right now you have invested $200 but only own $150 worth of shares.
What happens when the price goes up?
When the price goes back up (and it will) it may stop at $8 per share. Now what? Well, you invest your next $100 and buy 12 shares.
You now have 42 shares valued at $8 each. That totals $336. Your investment was $300 so you just made 12% off of your investment.
Combining the cost of averaging with the 10% recommended for us to set aside for savings or investment - what's stopping you from jumping in?
Lucy Vestirian is the webmaster for http://www.fyinvest.com which is the premier invest site on the Web. Visit http://www.fyinvest.com to learn about different investment ideas and strategies
I am often amused by the ads and offers I... Read More
Despite what you may have read or heard, anyone is... Read More
Money is probably the most challenging thing for many people... Read More
From tender age, we were exposed to myths about money... Read More
One very important wealth creating habit is to set up... Read More
You know about compounding right? You understand what pyramiding your... Read More
Whether an established conglomerate or a fledgling company, a business... Read More
Here's the truth: I have read hundreds and hundreds of... Read More
There could not be a better time to mull over... Read More
Estimated Reading Time: 4 minutes -- Envision your life 10... Read More
AS THE MARKET FLIES HIGHER, GOOD BUYS ARE BECOMING HARDER... Read More
"Join our program and retire in 3 months..." yeah, right.We... Read More
It all begins with a simple calculation.You are home on... Read More
Although there are advantages to selling other people`s products and... Read More
At any time in history, no matter what the current... Read More
Time and time again entrepreneurs are losing out on getting... Read More
Loose change that is, if you want a easy way... Read More
Wealth Secret 1 - Decide Your Outcome Right Now.Unless you... Read More
In today's unpredictable global economy, you obviously never know what... Read More
Most people want to get to the end of their... Read More
Steve Martin once delivered an opening monologue for Saturday Night... Read More
If you're reading this article, it means you are a... Read More
Here are some thoughts about the morphing of thought and... Read More
Have you wondered why financial experts only tell you certain... Read More
Have you seen a picture of the Parthenon in Athens,... Read More
The four main steps in building a wealth cycle foundation... Read More
No matter what income level you are currently at, generating... Read More
Financial planning is an ongoing process individuals and businesses should... Read More
"If you know how to spend less than you get,... Read More
At any time in history, no matter what the current... Read More
Money can be your servant or it can be your... Read More
Let's begin this lesson with a definition of the term... Read More
What if I told you that reading a book would... Read More
What if I were to tell you that almost everything... Read More
A mole travels one road, according to the way nature... Read More
Everyone wants to be wealthy, but most of us do... Read More
Like I said, If you are poor and on social... Read More
Loose change that is, if you want a easy way... Read More
At any time in history, no matter what the current... Read More
1. Save up to 50% per month on convenience cleaner... Read More
Time and time again entrepreneurs are losing out on getting... Read More
Anyone knows that material wealth is measured in goods: apples,... Read More
Endowments and endowment mortgages have received a lot of bad... Read More
We talked recently about the wealth formula:Spend less than you... Read More
This is a true story from my own experience that... Read More
No matter what income level you are currently at, generating... Read More
Here are some thoughts about the morphing of thought and... Read More
Uncle Sam and his band of merry-men, better known as... Read More
Want to be one of the lucky ones on the... Read More
E-currency is very popular on the Internet today. People use... Read More
How Much Money Will I Need to Earn to Retire?This... Read More
You can learn the secrets of world monetary flow if... Read More
In my last article on Creating Residual Income I mentioned... Read More
It is with great pleasure of having you here at... Read More
When young men ask me how to succeed, I tell... Read More
One very important wealth creating habit is to set up... Read More
We all go to school for about twelve years, kindergarten... Read More
A residual income is one that comes in no matter... Read More
There are many forms of investing online. While I can... Read More
This retirement account is so new and unique that you... Read More
The inability to come up with the necessary cash when... Read More
Parents must give serious thought to protecting their family through... Read More
I have a good friend who works in an area... Read More
There are few things in life that are more stressful... Read More
You have $100 in your bank account, your rent is... Read More
Simple tips on saving can very often make quite a... Read More
Wealth Building |