Proven Risk-Free Investment Plan
If you are a long-term investor in stocks, there is a very exciting investment plan. This is the most suitable program for beginners and veterans to invest in the stock market. Most investors, whether new or old, are constantly bothered by a fear: once you start investing in the stock market, the price of your stock will fall and it will spiral up when you sell your stock most likely , At a loss.
This is not just a phobia, an imaginary fear. This is a very real reason, especially if you want to catch the action of the market or the time that worries. Not only are real-time investors, even professional traders and fund managers have a difficult time measuring the way volatility and unpredictable market movements. Because you are a long-term investor, you do not want to play with your guessing game with your hard earned money. You want to be on a positive foundation. Therefore, you need a proven, conservative strategy that provides good value for your long-term investment. This type of investment work is based on the premise that if you regularly buy the same amount of stock, the unpredictable volatility of the investment over time (19459003)
time. When the price is low, you basically buy more stocks, and when the market is high to buy less, because you always invest the same amount. You do not have to worry about buying stocks at a higher cost, but selling stocks at a lower price. This is because the risk of timing is reduced. All you need to do is continually invest the same amount of money on a regular basis. If you buy index funds, your investment will grow with the market. Obviously, you have to reconcile with the market for a long time
This plan can be illustrated by an example. Suppose you are not investing in the dollar cost averaging principle. Instead, you buy the same amount of stock each month.
Suppose you buy $ 100 in the first month, $ 40 in the second month, $ 50 in the third month, $ 90 in the fourth month, $ 60 in the fifth month, and $ 50 in the first month $ 30 for six months.
Suppose your total investment in six months is $ 30,000 and you buy 600 shares. Your average cost per share price will be $ 50
Now suppose you buy your stock based on the dollar cost averages. According to it, you spend the same amount of money in 6 months, $ 30,000, so you spend $ 5000 per month. Let's say you are investing the same amount every month for 166.66 shares in the first month, $ 125 in the second month, $ 125 in the second month, $ 100 in the third month, $ 55 in the fourth month, $ 55.55 in the fourth month, $ 90 83.33 $ 60 for the fifth month, $ 30 $ 166.66 for the sixth month. You purchased a total of 697.2 shares for $ 30,000. If you divide $ 30,000 by 697.2, your average cost per share is $ 43.02
Obviously, you have invested in a minority in the second investment plan. Your savings per share are huge, although you invest the same amount but buy the share. You actually buy more when the price is low, and buy less when the price is high. Not only can you get more stock, almost 700, for the first time at an average price of $ 43 instead of $ 50.
However, it must be noted that it is easier to make such purchases by buying a rising market when your investment is appreciated. When the market goes down, you have to strictly follow your strategy. You also have to realize that every dollar that buys more in a declining market may lead to higher returns in the future as the market recovers.
Although it is not possible to predict future market trends, historically, the market has been rising for a long time, requiring conservative investors to follow