The ups and downs of investing
The last three months have been a great reminder to us as investors, that markets are a roller coaster. They’ve been up, down, up, down, and up again—some of the most volatile months these investments have ever seen.
All this volatility came after an equally rare few months of these investments growing steadily every month. And it’s the first time since launching Sharesies that some investors may have seen a negative Portfolio balance.
And although I’ve been investing for a while now (putting $50 each week into an investment club). Because we don’t track value each day, I haven’t really been exposed to the negative before.
More than once, I had to remind myself not to panic, while I watched my positive green returns work their way into a negative kiwifruit brown. It’s funny how our behaviours sometimes don’t align with what we know to be true in other areas we spend our money. Normally if I can buy something cheaper, I am really happy to take advantage of the sale!
Our post on dollar cost averaging has a couple of lines that are great to remember when returns are going down:
“Dollar-cost averaging is when you choose to invest a certain amount on a particular investment regularly, regardless of what the price is. This means when prices are high you will end up with fewer shares, but when prices are low you will end up with more.”
I put $50 a week into Sharesies using the dollar cost averaging investment strategy. The irrational part of my brain tells me to stop investing money when the prices go down. If I did that I would only be buying when the prices are high! This would be like only shopping at Briscoes when there wasn’t a sale!
Now that prices seem to be on the way up again it feels like a great time to give myself a pat on the back. I am back in the green! And if I hadn’t kept buying as the markets dropped in price it would have taken me longer to get back to this place of comfort.
It is also an awesome time to write a blog for the 'Leighton-of-the-future' to read if I think about panic selling. If I don’t need the money tomorrow, take advantage of the sale! A few ups and downs are part of the deal of higher returns over time.
We’d love to hear some of the tricks you use to keep motivated or your experiences with investing during moments like these.
Ok, now for the legal bit
Investing involves risk. You might lose the money you start with. If you require financial advice, you should consider speaking with a qualified financial adviser, or seek independent legal, taxation, or other advice when considering whether an investment is appropriate for you. Past performance is not a guarantee of future performance. This content is brought to you by Sharesies Limited (NZ) in New Zealand and Sharesies Australia Limited (ABN 94 648 811 830; AFSL 529893) in Australia. It is not financial advice. Information provided is general only and current at the time it’s provided, and does not take into account your objectives, financial situation, and needs. We do not provide recommendations. You should always read the product disclosure documents available from the product issuer before making a financial decision. Our disclosure documents and terms and conditions—including a Target Market Determination and IDPS Guide for Sharesies Australian customers—can be found on our relevant NZ or Australian website.
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