Use Dollar Cost Average in this Stock Market

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investor does not try to time the market but invests consistently every month or over a set period of time.Trying to time the market for the lowest entry in an investment is not the best idea unless the person is a very seasoned investor. Even these investors can make mistakes and get it wrong.By using the dollar cost averaging system the investor can build their wealth and savings over a long period of time. For instance, an investor can have an Individual Retirement Account (IRA) or 401 K set up and the company will take a portion of their salary each month to fund the investment account. There is a little more detail for IRAs and 401Ks but I will not discuss these retirement systems which is a different topic.Using the dollar cost averaged method is also used for regular investments such as buying stocks, bonds, precious metals, cryptocurrencies, and similar investments.<h1 id="44b6">Dollar Cost Average Helps the Investor</h1>If someone has a set monthly budget, they can use dollar cost average to make their investment. There is no set amount the investor can invest in the IRA and 401K other than the limit of these accounts. The investor should send what money they can for their investment account each month. Easy options are available as the investor can set up their automatic withdrawals for a set amount every month.<figure id="3557"><img src="https://cdn-images-1.readmedium.com/v2/resize:fit:800/1*vyXjjdJUKZ77TE2j3b0NkQ.jpeg"><figcaption

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Photo by <a href="https://unsplash.com/@esteejanssens?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText">Estée Janssens</a> on <a href="https://unsplash.com/s/photos/calendar?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText">Unsplas</a>h</figcaption></figure>For instance, the investor has $250 and they can set that up to be withdrawn from their paycheck every month for their 401K or from their bank account for an IRA. The set amount they have withdrawn each month is up to them. So they can have more or less than the$ 250 used in this example.Well-known investment company Vanguard stated on their website that, “dollar cost averaging spreads the risk of investing.”Investing a lump sum all at once is possible but it also opens the possibility of investing the money at a high price with the chance that the investment drops. Spreading the money out over a period of time with dollar cost averaging helps reduce the risk of buying at a high price.Many options are available for new investors to enter the market and the process to do this is not as hard as it looks.Happy Investing.Tom Handy is a Retired Veteran, Investor, and President of the El Paso Veterans Business Association. Keep in touch with Tom and his future articles@ <a href="https://readmedium.com/89fba93ba8c6?source=post_page-----b4184b1444ef----------------------">Tom Handy</a>.</article></body>

Simple Tips for the Average Person — Tips for the New Stock Investor

A s of April 2019, the Gallup poll reported 55% of Americans invest in the stock market. For new investors, I recommend they invest using the dollar cost average method which is not hard to figure out.

Before the Great Recession, 62% of Americans had invested in the stock market. This was from 2001 to 2008. Dollar cost averaging helps a person build wealth in their portfolio while avoiding emotional decisions that come with investing.

What is Dollar Cost Averaging?

Dollar cost averaging is when the investor buys stocks or another investment on a regular interval. For example, the investor buys shares of a stock over a period of time. The investor does not try to time the market but invests consistently every month or over a set period of time.

Trying to time the market for the lowest entry in an investment is not the best idea unless the person is a very seasoned investor. Even these investors can make mistakes and get it wrong.

By using the dollar cost averaging system the investor can build their wealth and savings over a long period of time. For instance, an investor can have an Individual Retirement Account (IRA) or 401 K set up and the company will take a portion of their salary each month to fund the investment account. There is a little more detail for IRAs and 401Ks but I will not discuss these retirement systems which is a different topic.

Using the dollar cost averaged method is also used for regular investments such as buying stocks, bonds, precious metals, cryptocurrencies, and similar investments.

Dollar Cost Average Helps the Investor

If someone has a set monthly budget, they can use dollar cost average to make their investment. There is no set amount the investor can invest in the IRA and 401K other than the limit of these accounts. The investor should send what money they can for their investment account each month. Easy options are available as the investor can set up their automatic withdrawals for a set amount every month.

For instance, the investor has $250 and they can set that up to be withdrawn from their paycheck every month for their 401K or from their bank account for an IRA. The set amount they have withdrawn each month is up to them. So they can have more or less than the $250 used in this example.

Well-known investment company Vanguard stated on their website that, “dollar cost averaging spreads the risk of investing.”

Investing a lump sum all at once is possible but it also opens the possibility of investing the money at a high price with the chance that the investment drops. Spreading the money out over a period of time with dollar cost averaging helps reduce the risk of buying at a high price.

Many options are available for new investors to enter the market and the process to do this is not as hard as it looks.

Happy Investing.

Tom Handy is a Retired Veteran, Investor, and President of the El Paso Veterans Business Association. Keep in touch with Tom and his future articles@ Tom Handy.