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The Stash Way: Invest Regularly

November 05, 2018

2 min read

Repeat after us:  There is no right time to invest, except maybe right now. And next week. And the week after that.

In this article, we’ll be talking about how investing regularly is a key part of The Stash Way.

Investing regularly is a better idea than trying to time the market

By investing regularly over time, adding more money when you can, you can avoid the perils of trying to time the market.

Timing the market is when you make guesses about which way the market will head, and buying or selling stocks based on those guesses, and it’s almost never a good idea.

No one has a crystal ball. By investing regularly, you can take your eye off the day-to-day noise of the market while feeling confident that you’ll be capturing the highs of the market, as well as the lows.

Why are the lows important? You can buy more of the investments you want at a cheaper price. That’s called “buying the dip.”

It’s important to note that investing regularly and dollar-cost averaging is not a protection against market volatility. It’s possible that during a serious market correction, dollar-cost averaging may not protect you.

Nervous? You can invest regularly in bonds and stocks

Not everyone has the same appetite for risk. And you may not want to keep adding to your stock holdings when the market goes down. (In fact, there’s a definite danger to having too much of your portfolio invested in stocks.)

If that’s the case for you, you might consider investing regularly in bonds.

Here’s the thing about the bond market: it doesn’t necessarily correlate with stocks. So, when the stock market falls, or even enters a correction or bear territory, bond prices may rise, or increase in value. There are also many different types of bonds, which can help you diversify.

Treasury bonds, issued by the U.S. federal government, are some of the safest bonds around since they are backed by the federal government. Investment grade corporate bonds, often issued by companies with a long history of profits and sales, can also be a good addition to your bond portfolio.

Defense, defense!

Something else to keep in mind: You can also invest regularly in something called defensive sector stocks. These are stocks in sectors such as consumer staples, health care, and utilities, that tend to be less volatile than other sectors.

That means, regardless of what’s going on in the economy, that consumer demand for the products and services produced by companies in defensive sectors is likely to remain stable.

Think about it: you will always need toothpaste and toilet paper from consumer products companies; similarly, consumers will always need to go to the doctor, or purchase prescriptions from health-care providers, and they’ll always need electricity and water from utility companies.

Follow the Stash Way

You can invest in a diversified portfolio that’s tailor-made to you. You can start small, adding more money over time.

The best time to start investing is today. And you can start with just $5.

Investing, simplified

Start today with as little as $5

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By Stash Team

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This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

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