In case you missed it the DOW jumped 236 points yesterday. The S&P was also up over 1% yesterday. Before yesterday’s rebound the market had pulled back approximately 2.5%.
While these numbers might seem minuscule in the big picture of things, there is an important message to take from this.
The market moves every day. Sometimes by a little, and sometimes by a lot. If you take the emotion out of your investing the daily, weekly or even monthly moves of the market shouldn’t be an issue to your portfolio.
Every Friday I put a $100 deposit into my brokerage account. Every month I put $500 into my Roth IRA. By investing on a constant schedule I can ensure myself DCA (Dollar Cost Averaging). By doing this, when the market goes up I am investing the same amount as I would when the market goes down. The only difference is that when the market is down for the week or month, I buy more shares of the mutual fund.
By sticking to my investment plan and constantly investing, I have little care for how the market swings each day, week or month. Timing the market is never a good idea. Very few have the ability to beat the market.
My advice: Keep it simple. Constantly invest the same amount each month into a mutual fund, stock, etc. Allow compound interest to accrue. Give it time.
Budget Smart, Invest Wise