During a weak economy, people may be reluctant to spend hard-earned money on investments and risk losing it all. Money blog Steadfast Finances says there's no need to be fearful of investing as long as you're smart about it.
Photo by epicharmus.
Fiscally savvy blogger Matt says it's tempting to succumb to the impulse to dump your investments while the economy is lousy and buy it back when it's better, but that's not the best approach to padding your retirement portfolio, he says.
Instead, you should consider adopting a counterintuitive approach (e.g. be greedy when others are fearful and fearful when others are greedy) by dollar cost averaging into a Plain Jane index fund or your favourite individual stocks when the news cycle is at its worst. Guys like Warren Buffett and Wilber Ross didn't become household names because they bought Cisco at the height of the tech bubble. They bought large stakes in troubled companies during times of fairly high despair at substantial bargains.
Matt acknowledges that there's no crystal ball when it comes to figuring out which horse to back in the stock market, but he does offer a few things to keep in mind when deciding whether to keep or sell the stocks you have. Hit up the post to check them out.
Has all the gloomy news about the economy left you wondering what to do with your investments? Share what's working for you in the comments.
Why it's Important to Buy during the Doom & Gloom News [Steadfast Finances]