One of the ways to grow your wealth is by investing. But many people do not really know how to invest. Even people who are used to investing have a dilemma during economic uncertainties.
The article point out 2 things about investor dilemma, which are:
1. When investor are waiting for the best opportunity to enter the market, they may miss out on potential gains when the market turns around and prices start to rise.
2. On the other hand, investors who enter the market in a lump sum risk losses in the short term if prices fall after that. In addition, they may not have enough liquidity to offset their losses.
So the current volatility in the market may provide excellent opportunity to pick up investment at dicounted prices, but it also means that the prices could plunge even more.
Then what should we do?
The article said that the solution may be dollar cost averaging, which involves placing a fixed amount at regular intervals, into a particular investment.
This means the investors will buy more units when prices are low and less when prices are high. This helps to smooth out the investment costs and risks presented by fluctuating prices in the market.
On the whole, this approach can help investors reap the benefits of staying invested while mitigating the risk of market volatility.
Thank you to TODAY for the article.
I in my opinion also agree that dollar cost averaging is a good way to invest.
Cheers! Have a great day.
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