I am glad you asked!
Don’t think you have enough money to start investing today?
Yes you can! To invest directly in the stock market at the cheapest cost you need to buy 100 shares of a company and that is called a Lot. If you don’t buy at least 100 shares, the price you will pay for those shares will be more expensive. The other issue is that you are not diversified, so if that company’s stock price goes down, you lose, but if you owned stock in multiple companies and multiple industries, then hopefully as some stocks in your account go down, other stocks would go up and minimize your lost. So what do you do?
Mutual Funds, ETFs and Annuities are the Answer!
Investing in these vehicles allow you the ability to diversify your investments when you have limited dollars to invest. Most mutual fund companies allow you to invest as little as $25 when you sign up to invest monthly, which is called dollar cost averaging. This allows so many people with limited funds to start investing in the stock market.
What are the benefits of Dollar Cost Averaging?
When you invest monthly you will get the benefits of more shares when the price is low and less shares when the price is high. In the end, the idea is that when you average all of your shares and prices paid, you will have gotten a cheaper price than if you would have invested a lump sum one or two times a year. See example below:
We could have invested our $1,200 lump sum in March or October and we would have only purchased 150 shares, which at the end of the year would have given us a profit of $300. The trick is to invest at the cheapest cost and investing a fixed dollar amount on a regular schedule will lower the average cost per share over time. This is Dollar Cost Averaging.
So what now?
If you want to learn more about investing or to learn more about investing strategies, call me or complete the Contact Us form from the Menu drop down, for a free consultation. Below are some of the services that I offer:
- Monthly and Yearly Coaching Packages available
- Tax Planning and Strategy Planning
- Insurance and Retirement Planning
- Budget and Credit Repair Management
- On-Line and Classroom Training and Coaching
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