It Does Not Matter When You Invest, Just That You Do
February 6th, 2010 |
Investing can be difficult to understand because there are many moving pieces and lots of controversy in what works best. Just when you begin to think that you understand enough of the basics to begin investing you discover that there is even controversy in when to make your investments. Do the factors that affect investing never end?
When to make my investment? Yes, you have the choice of dollar cost averaging, lump sum investing (start of year vs. end of year) or continuous automatic investing and these are just the basic options with nothing fancy added on. Does this really matter? Do you need to go out and learn about all the intricate details behind each of these?
When looking at your physical fitness one of the areas that is important is cardiovascular exercise, cardio for short. This type of exercise helps with improving the functioning of your heart plus burns calories. When you first start working out you can quickly be overcome by all the choices for how to perform your cardio. Do you go for low intensity, high intensity, interval or some other combination and what is this plateau thing that everyone is talking about? Unfortunately there is not one answer to which is the best all of the time. Why? Each person has different goals, and we all have different time frames for accomplishing our goal plus other factors such as how much time we have to exercise on a daily basis. Instead we need to understand the basics of each style and select the one style or combination of styles that works best for us and our circumstances.
This also goes for deciding when to make your investment. Following are three easy steps to follow to help you decide what works best for you.
First, learn enough about each approach that you understand when and where to use it. By learning that interval training helps the heart become healthier faster you may use that when you are short on time for a workout. More bang for your buck! Likewise when you learn that over time the best way to invest your money is in a lump sum at the beginning of the year you can adapt that strategy if your income is structured to have bonus payouts in January. You won’t be able to make any of those decisions without understanding what each one means for you, so start reading and asking questions about different types of investment timing approaches.
Second, after you understand the basics of each evaluate your situation and determine what you can do. Although you might want to do high intensity training to get you to your goal quicker, if your doctor has said that you need to stick with low intensity first then that is what you do! Likewise if you want to lump sum invest, but don’t have extra cash sitting around then you need to start with continuous automatic investing.
Finally, start investing. Don’t get stuck with paralysis by analysis and not do anything. You won’t lose the weight unless you do some sort of cardio. You won’t become rich by not saving any money so at a minimum set up an automatic investing program and get going.
Don’t use not having a complete understanding of investing as a reason not to invest, you will always find something new that you can learn about and debate about before you begin investing. Ask for help and get going! You can always go back and learn the intricacies of dollar cost averaging after you have started investing; the battling sides will still be there.
Andrea Travillian
http://www.smartstepomaha.com
Guiding you to Living Well and Retiring Rich
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