In times of economic strife or uncertainty, many people give up investing entirely because they are afraid of one of two things:
- You'll lose all your money.
- You don't want your stock value to go down before it goes up. You want to know what the cheapest price is.
If you are afraid you'll lose all your money and don't want to take the risk, that's okay. Wait until you have fifty dollars you won't feel heartbroken if you lose and then invest in one share or even a partial share of a good stock in a company you can be pretty sure isn't going to go under.
If your problem is that you want to buy at the cheapest price, here is a way to get around that. Dollar Cost Averaging will help you save money in the long run.
Instead of buying all your stock at one time and then hoping it doesn't go down, buy fifty dollars now, and then put in a limit order to buy fifty more dollars when the stock goes down five points (points = dollars per share) – if the stock never drops that low, your order won't be placed and you won't buy more stock. If it does, your order to buy will be placed automatically and you now have 50 dollars' worth at the higher share price, and fifty dollars at the lower share price. That means the average price per share may not be the absolute lowest, but it's less expensive than if you bought all your stock at once.
Jennifer Gniadecki is an investor – she is using stocks to create a better future for her family a little bit at a time. Visit her at Beyond Mom. Corporations looking for a great writer should visit jennydecki.com to see her online writing portfolio.
Image Source: woodsy
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