Stress-Free Investing in Four Easy Steps, Part 3

Here's part 3 of an article from Kiplinger's where they promise to share four mantras of successful investing:

Mantra 3: Dollar-cost average

It's been said that the stock market runs on fear and greed. But these emotions are your worst enemies. It can be hard to convince yourself to put more money into your account when the market is tanking and your balance is going right along with it. But if you fail to invest during a down market, you miss out on low prices and may miss the rally when it inevitably comes.

A simple strategy called dollar-cost averaging can help keep your emotions in check. By investing a fixed dollar amount at regular intervals you smooth out the ups and downs of the market. Take out all the emotion and guesswork and investing becomes much less stressful.

It's a good idea to invest once a month or once every quarter, depending on what your budget will allow.

I dollar-cost average with many of my funds. All my 401k funds get an additional investment every month. Plus, I have set up a system where funds from my checking account are invested into five mutual funds every month. I was doing this manually each month until I read The Automatic Millionaire. Now it all happens automatically.

Click here to read part 4 of this series.

Comments

[Belasarius]

I just discovered your blog and we seem to be embarked on similar voyages. I've just started my own, much more modest, blog to likewise try to sift through the junk on finances and investing that out there. I've just posted something on Dollar Cost Averaging that you might find of interest:

http://rationalfinance.blogspot.com/

Like you, I'm selling nothing, nor am a finance professional in any way shape or form.

[FMF]

Welcome to the pack! ;-)

I'll add you to my Bloglines subscription and watch you grow. Good luck!