How to Get Off the Sidelines and Start Investing Again – It’s Not Too Late

How To Get Off The Sidelines And Start Investing Again

The stock market has had an amazing run lately, but too much money is still on the sidelines waiting. According to a recent survey conducted by Kiplinger’s magazine, almost half of all Americans do not even know that we have had a fantastic run in the Dow Jones Industrial Average and the S&P 500 index for the past 15 months. People need to get off the sidelines and start investing again. They thought that the stock market had been down in 2012 instead of realizing it was up 13%. And, still, others know about the stock market’s great and are still sitting on the sidelines waiting to get in the market or think that they have missed the boat. Many … Read more

Don’t ‘Fire and Forget’ Your Finances and Investments

Don't Fire and Forget your financesDo you fire and forget your finances and investments like an unguided, general-purpose dumb bomb falling from an Air Force bomber? Or, do you constantly watch your investment and track them like a TOW missile? The answer is often to find that ground road between the two, the compromise.

Far too many of investors often choose the path of least resistance. After we finally overcome the initial roadblocks and start investing for retirement and other financial goals, many of us get set in our ways. We let our investments run their course without following up with them or even checking on the periodically.

You must find a balance in investing. Where do we draw the line in being too involved versus having a hands off approach? We have to find that middle ground.

Deep down, we all know that we should have some checks and balances with our investments. Here are a few times when you should look back in on your investments.

Look at Your Asset Allocation

Are your investments unbalanced with more bonds or more stock than you planned? With the recent fluctuations in the stock market over the past few weeks, many investors find their asset allocation, their asset class percentages, misaligned from their plan.

You should look at rebalancing your portfolio at least once a year. The mix between stocks, bonds, cash equivalents, and other investments that you have cannot simply be set on autopilot and forgotten about. You need to relook it every so often.

A couple of good tactics and techniques that many employ are the simply rebalance your investment portfolio after the New Year. I know other investors who like to look at their investment mix around their birthday. It’s an easy date to remember for most of us, although many may not like the reminder of getting older.

Whatever tool you use or date you set, put it on your calendar. Have you had a great year with your stocks? Are you underweight in bonds for your target? Find time to rebalance your portfolio once a year.

Dollar Cost Averaging Is a Great Tool

Most of us have heard that we should pay ourselves first and place investing for retirement and our other financial goals high in our budgeting priorities. And, dollar cost averaging is a great tool to accomplish that goal.

With dollar cost averaging, you invest a set amount of money each month in an investment regardless of that investment’s share price. In some months, you will pay a higher amount for few shares with rising share price. But, other months, you’ll be able to purchase more shares with the same amount thanks to lower share prices.

Over the course of a long time horizon, your costs will start to average out to a middle range, hence the name, dollar cost averaging. Typically, your total costs will be lower on a per share basis than had you simply just tried to time the markets.

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What Is Dollar Cost Averaging? – Advantages and Drawbacks

What Is Dollar Cost Averaging?

Dollar cost averaging is a well established, tested, and extremely reliable approach to accumulate wealth.   An investor who wants to put a lump sum of money into the stock market or mutual funds is wise to invest the money over a period of time in equal installments in order to avoid the devastating effect of a drop in the stock or mutual fund’s share price immediately after investing a single, lump-sum investment. What Is Dollar Cost Averaging? Dollar cost average, or DCA, involves buying the same dollar amount of an investment at regular intervals over the course of a set period of time. In doing so, the investor will purchase more shares of an investment when the share price … Read more