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SYSTEMATIC INVESTING (DOLLAR COST AVERAGING)
Rather than use guesswork to try and time your investments, consider systematic investing. The concept of systematic investing is that you are not trying to time your investments to a certain date or event. You invest a set dollar amount consistently over time in various market conditions.
This allows you to have a set plan or disciplined strategy, so there is no guesswork and you don't make "emotional" investments or sell based on market news or when your stock goes up.
When you regularly invest a specific dollar amount, market swings don't affect your plan. If you want to reduce your average cost per share, having a strategy such as Dollar Cost Averaging allows you to buy more shares when the price is low and fewer shares when it is high.
This disciplined approach to investing is a time-honored way to help balance your gains and losses. With Systematic Investing, an investor may not always achieve the positive results of buying at the low point and selling at the high point, but will not suffer the negative consequences of buying at the market's highs and selling at its lows.
Such a plan involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through periods of low price levels. Such a plan does not assure a profit and does not protect against loss in declining markets.
Ask an Northwest Financial LLC financial representative if a systematic investing program would meet your needs.
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