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Thursday, October 09, 2008

Follow Through Your Investment Plan

Today, I encountered a comment from an investor who said that he felt that markets are too volatile currently and he will do dollar cost averaging at a "better time".

Below is the definition of Dollar Cost Averaging:
Dollar cost averaging is a technique designed to reduce market risk through the systematic purchase of securities at predetermined intervals and set amounts.

Obviously, what the investor said above is not dollar cost averaging. He is trying to make purchases depending on market conditions. Which means, if he sets out to do dollar cost averaging initially, he is not following through his plan.

A lot of investors got panic lately and abandon their investment plan due to current market conditions. There is a saying - "If you fail to plan, you plan to fail". I would like to add that if you don't follow through your plan, your plan will fail no matter how good it is.

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1 Comments:

Blogger Nutch said...

Wow. Investment master!!HOHO!!

1:26 AM  

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A self-directed investor, looking to invest for retirement needs and bypass all those expensive financial planners/insurance agents. Investing is fun, profitable or most important of all, knowledge gained is useful for the rest of your life!

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