Cost Averaging - It Makes Sense (Dollars & Cents)

It's no secret that the market goes UP...the market, goes DOWN. That's the basics of Investing 101.

For many of us the shape of the market day to day has about as much influence on our lives as the time of the tides that day. But for investors - especially first time investors - it can be a rollercoaster of heart racing highs and stomach churning lows. Every movement is being carefully reviewed and if it turns down then investors with itchy feet jump out.

If you know the benefits of investing, how can you avoid the stress of putting your hard earned money into the market?

Financial planners and investors are quite clear on the subject. New investors should not make an investment unless they are going to let it sit at least 5 to 7 years - the longer the better.

Why?

Well, the economy DOES move up and down, but we have never seen it bottom out (and if it did - well, you'd have much bigger concerns than your investment).

By selecting a diversified portfolio, such as a mutual fund, you can usually base your prediction on past activity and you'll see that in any 7-15 year period the investor always came out with more than he put in.

How do you take advantage of that? When should you invest?

Well, if shares were being sold for $10 each and you had invested $100 you would have purchased 10 shares. Now, if that is your whole investment you would be very upset if the value went down to $5, wouldn't you? Now your stock is worth $50. What would you do? Sell before it goes lower and loose $50?

Using the 'Cost Averaging' technique:

Cost averaging means you continue to put the same amount of investment into the market regularly - preferably every month. Now if you did that you would have invested another $100. At $5 a share you would buy 20 shares. Right now you have invested $200 but only own $150 worth of shares.

What happens when the price goes up?

When the price goes back up (and it will) it may stop at $8 per share. Now what? Well, you invest your next $100 and buy 12 shares.

You now have 42 shares valued at $8 each. That totals $336. Your investment was $300 so you just made 12% off of your investment.

Combining the cost of averaging with the 10% recommended for us to set aside for savings or investment - what's stopping you from jumping in?

Lucy Vestirian is the webmaster for http://www.fyinvest.com which is the premier invest site on the Web. Visit http://www.fyinvest.com to learn about different investment ideas and strategies

---

From Debt to Financial Freedom

The vast majority of working people are in debt. The... Read More

Methods Of Raising Instant Cash

The inability to come up with the necessary cash when... Read More

How To Get Paid Instantly Via Stormpay? Try Online Rewards Programs

E-currency is very popular on the Internet today. People use... Read More

10 Ways to Save $50 Per Month: The Art of Pinching a Penny Until It Screams

1. Save up to 50% per month on convenience cleaner... Read More

Trustees: Who Can You Trust?

Early in my legal career I represented two young women... Read More

One Pipeline Is Worth A Thousand Paychecks

It is with great pleasure of having you here at... Read More

A New Paradigm Shift In Earthly Wealth

Hello,If you dont understand this yet, or have not heard... Read More

Top 10 Secrets of Getting Rich!

As many people have observed, "Success leaves clues." If you... Read More

Real Estate Stories that Show You How!

Let's begin easing you out of the pits. I mean,... Read More

Profit from Your Own Information Empire!

Would you like to profit from your own information empire?... Read More

Create Tax Savings And Transfer Wealth To Your Child With A Roth IRA

Parents must give serious thought to protecting their family through... Read More

Spiritual and Emotional Money Goals: The Keys to a Financially Free Future

Are you setting the right money goals?Most people believe having... Read More

The Morphing of Thought and Cash

Here are some thoughts about the morphing of thought and... Read More

Pennies From Heaven

I want to share an experience I had in common... Read More

The Wealth Connection ? 2 Steps to Brighten Your Golden Years

Estimated Reading Time: 4 minutes -- Envision your life 10... Read More

I Dont Need A Financial Coach To Help Me!

You've been thinking that your financial life could probably be... Read More

Money Myths Of The Poor

From tender age, we were exposed to myths about money... Read More

Want Money? You Got It!

Six out of six people who were asked to list... Read More

Cutting Costs Can Significantly Increase Your Income

As a work at home Mother, I know the value... Read More

Your Own Products Can Make You Rich

Although there are advantages to selling other people`s products and... Read More

Residual Income - The Myth

"Join our program and retire in 3 months..." yeah, right.We... Read More

16 Mantras for Building Financial Wealth

Everyone wants to be wealthy, but most of us do... Read More

The Predicament of the Newly Rich

They are the object of thinly disguised envy. They are... Read More

Q and A: Financial Independence Tips For Women From Coni Cecil

As a woman Netpreneur, I sat down via e-mail with... Read More

The PDQ? Factor

It's the beginning of a brand new year: a time... Read More

Compounding: The Science Of Exponential Money Generation

It all begins with a simple calculation.You are home on... Read More

Who Else Is Tired of Life Punching Them in the Face?

Remember the bloodied face of Randall "Tex" Cobb?He was a... Read More

Uncle Sams Snake Oild

Uncle Sam and his band of merry-men, better known as... Read More

10 Wisdom-Based Wealth-Building Strategies

"It's the business of your life?and you're the CEO!" Gala... Read More

Learn How to Bank Like a Banker

The business of banking has changed dramatically over the last... Read More

Steps to Financial Freedom

Financial freedom is the power to do what you will... Read More

Simple Strategies to Making Financial Gain

Now is a great time to make it a habit... Read More

Easy Ways to Save $1,000

Vacation season is upon us and it can be tempting... Read More