Within days of the COVID-19 pandemic sending shockwaves around the world, Markets dropped and for many the big panic sell began. Then Tuesday 24th March 2020 saw the FTSE 100 record its second biggest percentage rise of all time. And those who had sold shares just days earlier missed out.

If you are able to look beyond the sensationalist headlines of newspapers and tv stations, investing during these periods can present many opportunities.

Taking Away The Emotion Of Investing - Understanding Dollar Cost Averaging

In simple terms, Dollar Cost Averaging is the practice of using regular deposits to help smooth out stock market investment volatility. The key point about dollar cost averaging is to invest on a regular basis. In a fluctuating market, cost averaging can allow you to benefit from buying more investment units when prices are lower.

Our free to download e-guide explains how to

• Remove the guesswork
• Reduce the danger of mistiming the market
• Remove the emotion from investing
• Remain focused on the long-term
• Save in a volatile market
• The Beauty Of Dollar Cost Averaging
• The Importance Of Sound Advice

Beyond The headlines

A lot of time and research goes into creating an investment portfolio in line with your attitude to risk and dreams for the future. Don’t let it be derailed by a newspaper headline or a dip in the markets.

If you were to sit and watch markets at any given time, you will see they fluctuate, often wildly, on an hourly basis.

Making decisions based on short-term activity can be extremely harmful to your long-term plans.

Why Should I Adopt The Dollar Cost Averaging Approach?

By investing a consistent amount at regular intervals, you can gradually ‘drip-feed’ into the market regardless of the price on any given day.

The table above also illustrates the growth experienced after a crisis historically and why it could be a valuable time to make your cash work for you.