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!
A few months ago we released this blog on dollar cost averaging. When I read back on it there are 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, including the potential loss of principal. The info provided above isn’t a recommendation to buy, sell or hold any financial products available through the Sharesies platform. Before investing, consider your investment objectives and read the fund’s product disclosure statement carefully. It contains the fund’s investment objectives, risks, charges and other information which should be considered carefully before investing.