A Lifetime of Investing — How to Get Started

You’re just out of college or you’re in the early years of your career. How do you begin to pursue your financial goals at a time when you may have limited income and a variety of expenses to cope with? It may not be as difficult as it sounds if you take advantage of a few time-tested strategies.

• Buy and Hold for the Long Term — Some of your largest financial goals — retirement, for example — are decades away. With that kind of time horizon, you may not need to worry too much about day-to-day fluctuations in the value of your investments. You can potentially afford to ride short-term volatility out and stay focused on the long-term performance of your investments. Keep in mind, if you try to “time” the market, or make decisions based on short-term developments, you could guess wrong and miss out market upturns.
• Invest on Schedule — Dollar cost averaging (DCA) is an impressive-sounding name for an even more impressive strategy — investing a predetermined amount of money on a regular basis, such as once every month.* DCA can help take the emotion and guesswork out of investing. And when you invest the same amount each period, your money will buy more shares when prices are low and fewer when prices climb. Over time, your average cost per share could be less than the average price per share.
• Take Advantage of Compounding — Even if you invest a relatively small amount on a regular basis, you may still be able to pursue large goals over time thanks to the power of compounding. Compounding is when previous earnings from an investment remain invested and in turn earn more money for you. The earlier you start investing, the more your money may compound. Assume that your investments earn 8% annually. If you invest $2,000 a year from age 25 to 35 ($20,000 in all) and then stop completely, you could accumulate $315,000 by age 65. But if you wait until age 35 and invest $2,000 a year for 30 years ($60,000), you’d accumulate just $245,000 by age 65.**

Procrastination has been called the thief of time. Don’t let it rob you of a more secure financial future — start investing as early and often as you can. Contact a qualified financial professional when you’re ready to get started or just want to learn more.

*Regular investing does not guarantee a profit nor protect against a loss in a declining market. Dollar cost averaging involves continuous investments in securities regardless of fluctuating price levels. Investors should consider their financial ability to continue purchases through periods of low price levels.
**Hypothetical examples are for illustrative purposes only and are not indicative of any particular investment. Investment returns fluctuate such that the stated rate of return may not be achieved.

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