Avoid Timing the Market, use Dollar cost Averaging strategy
It is extremely difficult to time the market.
Any financial market in the world experiences both bad and good times. Never expect the market will go up forever and go down forever. It is impossible. Never believe in predictions
Instead of spending the time to predict when the bottom of the market will take place and investing a lump sum of money at one time, it is recommended to invest a constant amount of money periodically.
The risk of timing the market incorrectly could be greatly reduced in this strategy - it lessens the risk of you investing a large amount of money into the market at the wrong time.
Regardless of economic conditions, using this strategy, an investor is prevented from making massive losses with large amount of money at one go in a volatile environment should the market turn against them. Of course, an investor will also not going to make a big profit in this case.
Due to market decline, using this strategy, investor would be able to accumulate more stocks or units of fund at lower prices. Similarly if the market is in up trend, investor would only accumulate fewer stocks or units of fund. This would lower their average cost of investment and help smooth out returns in a volatile market, lower overall investment risks and help you to gain better overall profits when the market resumes its upward trend.
As long as the market moves above its long term average, you should be able to make money! The only catch in this strategy is you must only be invested in quality stocks, not speculating based on rumours.

October 12th, 2008 at 8:40 am
[...] the market is not easy. Dollar cost averaging strategy could be a good alternative in current [...]