- Albert Einstein
Just like changeable mountain weather, volatile financial markets can be unpredictable for individual investors in the short term. But over a longer time span of years and decades, it’s possible to take advantage of both the compounding nature of regular investments and a regular reduction of risk. (This is sometimes known as ‘dollar-cost-averaging.’) History shows us that financial markets worldwide tend to go through cyclical ups and downs – of course, these are usually only seen with the benefit of hindsight.
However, it’s possible to reduce the ‘opportunity cost’ that can come with committing a significant proportion of your disposable income to the financial markets. For intelligent investors this comes down to not committing all your available funds at any one time or to any particular asset class. (Resist the urge to follow popular market timers or stock picking ‘gurus’, as the market is a great humbler of such egos over time.)
How then does a rational person stay in the market but not lose their shirt? This is where dollar-cost averaging is a proven strategy because it allows an investor to drip feed allocated capital into selected investments – at a rate and amount they’re comfortable with. The potential returns from this long-term approach are more likely to outperform inflation and can provide access to opportunities that you may not currently have.
So, if you’re serious about making regular savings a part of your long term financial planning, we invite you to get in touch with Select Asset Management today. We’ll first listen carefully to your requirements and then use our long standing business relationships with a range of trusted international financial institutions to recommend regular savings plans that best meet them.
Contact us today to arrange a no-obligation discussion on how regular savings plans can best meet your financial future.