When conquering financial mountains you are likely to encounter adverse conditions…

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.)