In this article, we want to highlight the benefits of regular investing over trying to pick the best time to invest in the market. We’ll talk about why this is the better strategy and how you can do it too.
Investing by adding money at regular intervals can help you avoid the pitfalls of trying to time access to the market. If you’re trying to guess whether a stock will go up or down over the next week or month, you’ll likely be in trouble. By investing regularly, you can put yourself at ease knowing that you’ll be capturing both the highs and lows of the market.
the markets generally are use unpredictable, so that one has to have different scenarios. The idea that you can actually predict what's going to happen contradicts my way of looking at the market.
-George Soros, Billionaire Investor
Bonds on the regular
Naturally, there is still a risk that you won’t be able to average out your market purchases when the market just keeps going against you. If you have a lower risk appetite, you could also consider investing regularly into bonds.
The bond market doesn’t follow the stock market – if the stock market falls, bond prices could rise or even increase in value. The market also has many different types of government or corporate bonds, which can help you diversify.
Government bonds from the UK will be some of the safest around, as they are backed by the government. Investment grade corporate bonds can also be a good addition to your portfolio.
Keep it in the theme
With Wombat, you can regularly invest into a particular theme of stocks. This could be around your favourite types of brands or a certain type of asset, depending on the theme. Some will be more volatile, and some will be less.
If you choose a more stable theme that has lower risk attached to it, the price is likely to be less volatile and remain stable. For example, if you invest in the theme that includes the world’s best companies, it’s likely that consumer demand for these firms will remain relatively high.