“Regular saving makes you love – and long for – bear markets.”Nick Murray
They say “consistency is more powerful than perfection”, which also applies to growing your investment portfolio!
One way to manage investment risk during a volatile market is to save regularly, called “dollar-cost averaging”. KiwiSaver is an excellent example of “dollar-cost averaging”. The idea is to invest a set amount of money at regular intervals no matter how the stock market performs. With this approach, you will be able to buy more shares when prices are lower and fewer shares when prices are higher.
As a long-term investor, you should be less concerned about the current price of stocks and more interested in the number of shares you can accumulate over time. You want to accumulate the largest quantity of shares possible. Adding a consistent dollar amount to your investment account regularly to buy as many shares as possible and buying more when prices are lower will help you achieve that goal.
You cannot control share prices and cannot predict with consistent accuracy when prices will change. You can control how much you invest and the strategy you implement. Focus on accumulating as many shares as you possibly can. The best way is to keep saving consistently over time.
Click on the link to learn more about the Power of Regular Savings, including a Hypothetical Scenario, by Ben Brinkerhoff from Consilium.
Disclaimer: This article is intended to provide general information only. It does not take into account your personal needs or circumstances and is not intended to be viewed as investment or financial advice. Should you require financial advice, you should contact one of our financial advisers—past performance is not a guarantee of future performance.