When it comes to investing in the stock market, many of us will hear stories that make us want to step out of our comfort zone and dive right in. This tends to be more prevalent when the stock market is doing as well as it is at this time. However, regardless of how well or how poorly the market is doing, I think it is advisable to avoid being hasty when accumulating investments in the stock market. As a matter of fact, this should be the case for pretty much any type of investment, including real estate which is also doing well.
Savers know that it takes time to accumulate money, and for this reason, when risking any of that money in any sort of investing, we should do it slowly and methodically. The use of commission-free brokers like Robinhood to slowly establish positions over time is one way to accomplish this. However, there are now other affordable services arising that offer a more diversified approach to investing, while making an attempt to keep the investor’s cost low. I will try to cover those at a later date.
On another note, one of the reasons I believe in establishing savings accounts for emergency and stability before moving on to investing, is to avoid being reliant on the invested money when we finally start investing. This approach allows the invested money to work as it should without us disrupting the process when an unexpected expense shows up. Our finances should be structured in a manner where our invested monies are insulated from our daily needs.
Taking a look at the performance of the stock market over the past ten years should give us pause about being hasty in committing too much to the market at these levels. It should indicate that a correction is due, though the timing of such a correction or the level the stock market will be when it comes, is anyone’s guess.