You want a home of your own, an education for your kids, a comfortable retirement someday and a little fun along the way. These are the dreams we all seem to be born with. To achieve them, we must become investors.
Practice Dollar-Cost Averaging
Dollar-cost averaging is a reliable way to smooth out the ups and downs of the stock market. You invest a fixed amount on a regular schedule: $25 a month, $50 a month, $500 a month — whatever fits your budget. Your fixed number of dollars will automatically buy more shares when prices are low than they will when prices are high. As a result, the average purchase price of your stock will be lower than the average of the market prices over the same length of time.
Dollar-cost averaging won't automatically produce a profit. But by investing on a regular schedule and sticking with your plan, you're virtually guaranteed to do better in a generally rising market than investors who try to sell at the top and buy at the bottom. History shows that the odds are strongly against that kind of timing.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
DRIPs
DRIP investing lets you buy small amounts of stock on a regular basis without going broke paying the commissions. A growing number of companies are willing to sell shares directly to investors, thus allowing you to bypass brokers' commissions. These programs also make you eligible to participate in the company's dividend reinvestment plan, or DRIP. For a list of companies offering such plans, check Directinvesting.com.
No-Load Mutual Funds
No-load mutual funds are ideally suited for dollar-cost averaging. There are no sales commissions when you buy, and you can invest a small (or large) amount of money on a regular schedule, even if your dollars buy fractional shares. Funds will let you have money transferred regularly from a bank account.
-
Stock Market Today: Stocks End Higher in Whipsaw SessionThe main indexes were volatile Thursday with Nvidia earnings in focus.
-
Trump Picks Dr. Oz as Head of Medicare and MedicaidPresident-elect Donald Trump picked Dr. Mehmet Oz to lead the Centers for Medicare and Medicaid Services. Here's what to know about the former TV host.
-
Start-ups Trying to (Profitably) Solve the World’s Hardest ProblemsThe Letter More investors are interested in companies working on breakthrough science to tackle huge societal challenges. The field of deep tech has major tailwinds, too.
-
The Big Questions for AR’s FutureThe Letter As Meta shows off a flashy AR prototype, Microsoft quietly stops supporting its own AR headset. The two companies highlight the promise and peril of AR.
-
China's Economy Faces Darkening OutlookThe Letter What the slowdown in China means for U.S. businesses.
-
Should We Worry About the Slowing U.S. EconomyThe Letter With the labor market cooling off and financial markets turning jittery, just how healthy is the economy right now?
-
Kiplinger Special: How Businesses Should Budget for 2025Kiplinger Forecasts From fuel to AI software subscriptions, here's what you can expect to pay next year.
-
Intel Braces for an Even Tougher Road AheadThe Kiplinger Letter Amid a long, costly turnaround, Intel resets expectations again. Its new woes raise questions about U.S. industrial policy and global chip competition.
-
Kiplinger Special: The Long-Term Future of the U.S. Economy
The Kiplinger Letter Kiplinger's report into what it will take the U.S. to maintain a healthy economic growth rate.
-
Fed Rate Cuts Still on HoldThe Kiplinger Letter With inflation stubbornly elevated, the Federal Reserve will keep interest rates high for now.
