Investing regularly – the benefits
By investing what you can afford on a regular basis – and forgetting about it – those small amounts could soon turn into something worth having. Here are a few of the potential benefits of forming a regular investment habit.
-
01
Even out the ups and downs
The markets rise and fall all the time, so if you’re investing a lump sum and then the market experiences a fall, it could take a while before your money builds back up again.
By investing regularly, you could benefit from highs and lows in the market – what they call ‘pound cost averaging’ – and this helps cut down the risk of investing when the market is high.
-
02
Stay rational
Investing regularly removes the worry of trying to decide when to invest or withdraw your money. Trying to time the market is difficult and is often driven by emotion. And it’s thought of as a riskier, short-term approach.
Making a regular payment every month over the longer term, five years or more, means you invest whether the times are thought of as ‘good’ or ‘bad’.
-
03
Invest what you don’t need
You don’t always spend the same amount of money every month – sometimes you’ll have more of your pay left over than others. Investing regularly means you can squirrel any extra cash away and build your pot up quicker.