Good day, it’s another opportunity for us to have our investment talk. Yes! We all know investment can be a tricky business, but I always try to simplify an investment strategy to help you make the right decision. Investment does not have to be geeky and technical, and it can also be fun and simplified.
Today, we will discuss the benefits of regular investments and why you should consider this type of investment. One of the factors that will ensure gain from your investment is timing. You have to know when to invest and when to take profit. And with regular investment, we can time our investment in a programmed manner to keep us in the right direction of the market.
It does sound clever and tricky at the same time. Right?
Timing is an intelligent investment strategy, but it is also tricky. You need access to prior information or analysis to get your timing right. And then you can buy at the low price and benefit when the market picks up. But with so much information at our fingertips, especially since we are in the age of internet technology, it is difficult to determine and analyse the right time.
Nevertheless, there are different strategies developed for investors to benefit from market fluctuation. And one of those strategies is regular investing, which will also help us time our entry into the market.
Simply put, regular investing involves putting your money in the investment periodically rather than in a considerable sum at once. For example, I have 2000 to buy shares at 20 per share but decide to spend 1000 on the share during my first entry, which gives me 50 shares.
While I will spend another 1000 to buy the same shares the next month as the share price drops to 10 per share, which gives me 100 units. So at the end of the second month, I will be left with a total sum of 150 shares.
Imagine spending 2000 in the first month when the shares were 20 per unit, and then I will be left with 100 shares per unit by the second month.
I hope that explains regular investment.
Just like other types of investment strategies, regular investment has its cons. For one, it may not be favourable for a situation where there is a steady increase in stock prices, but we know that is not always the case. Nevertheless, I will recommend regular investment because of the following reasons.
You don’t need to spend huge amounts of money as investment capital
The regular investment strategy is suitable for all kinds of investors. Those with small or considerable funds to invest can adopt this strategy, for it does not require you to spend much on the initial investment. With massive funds, you can quickly spread the funds bit by bit over a while.
While those that do not have huge capital can start with what they have and continue to invest with additional funds, they can grow their shares quickly with regular investment spread over time. As seen in the illustration above, a regular investment of 1000 a month may earn you more shares than someone who invested 2000 at the same time.
Regular investment does not require much technical knowledge of the market
Are you one of those that gets confused with the charts, figures and analysis you see daily on CNBC, Yahoo Finance, Bloomberg and other financial institutions? Well, with regular investment, you don’t need much technical knowledge of the market to see your shares grow over time.
It is a simple strategy that requires you to invest certain (planned) funds regularly. The system is designed to help investors take advantage of the fluctuation in the market to earn more points on the stock market. You don’t need to worry much about the daily analysis of the stock market. Some investors may describe it as setting your investment on autopilot.
Fast and straightforward execution of decision making
Experienced investors will always tell you the importance of timing in investment. It would be best if you took prompt decisions at the right time to benefit from the stock market. However, too much analysis, charts and figures in front of you may deter you from making the decision fast enough to enter the market at the right time.
But with a regular investment strategy, you may just be waiting for the subsequent low or your predefined period of entry. Thus, there is no hesitation in your decision to enter the market, which makes you take full advantage at the required time without emotion or second-guessing yourself.
It offers flexibility with your personal finance
I will advise regular investment, especially for people with no source of recurring income. The strategy is flexible enough for you to change your financial approach to the market. For instance, you may decide to reduce or increase the investment due to your present capability, or you can afford to skip buying shares when prices are high beyond your planned entry.
The regular investment allows you to take in the present situation of your personal finance, the market and other factors when investing. This strategy of investing does work for all types of investors and in all kinds of needs. I will recommend the regular investment to any investor who wants to profit over time in the stock market.
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https://lifestyletipsbyantoaneta.com/ebooks/
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https://lifestyletipsbyantoaneta.com/business-online-masterclasses/
Recommended books for further reading:
- Intelligent Investor: The Definitive Book on Value Investing – A Book of Practical Counsel
- The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits
- Investing QuickStart Guide: The Simplified Beginner’s Guide to Successfully Navigating the Stock Market, Growing Your Wealth & Creating a Secure Financial Future
- How to Own the World: A Plain English Guide to Thinking Globally and Investing Wisely: The new 2019 edition of the life-changing personal finance bestseller
- The Financial Times Guide to Investing:The Definitive Companion to Investment and the Financial Markets: The Definitive Companion to Investment and the Financial Markets
If you are looking to open an investment account, follow these links below:
- Passive income
- Silver & Gold coins
- Trading212
- Freedom24
- FreeTrade
- COINBASE
- Interactive Brokers
- eToro
(‘68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.)
