the importance of making regular contributions to your investment folio

For investors just starting out, there’s a lot to take into consideration. 

There are lots of new words and new concepts, there are loads of options and opinions andddd frankly it can get really overwhelming. 

The team at Sharesies (an incredible micro-investing app that we’re rather fond of) have identified this and they’ve collaborated with us to help educate our community on exactly what you need to know when it comes to investing. Because they believe, like we do, that investing shouldn’t be hard and that too many of us (especially young women) have been left out of the investing conversation for too long. 

One confusing part of investing we’re asked about a lot is how regularly we should be contributing to our share portfolio. Is it enough to just throw in a lump sum every couple of years or do we need to tend to our investing more consistently? Well, long story short, the answer is we need to be doing it consistently. Here’s why:

• We need to remember why we’re investing.
  If you’re just throwing money at your folio every now and then with no real logic tied to it, or maybe you’re investing lots at one time because you’re hoping to ‘time the market’, then we need to rethink why you’re investing. As we harp on about time and time again, investing isn’t a get-rich-quick scheme, it’s a long-term commitment, and we need to understand that to avoid being stung by inevitable market fluctuation. Too many people try to outsmart the system by timing the market, but regular contributions over the long-term are a much safer option.

• Return on investment.
  If we invest consistently over our lifetimes, the reward we end up with will be so much greater than simply investing as a one off. Plus, we won’t have the anxiety of stressing that the huge amount of money we invested yesterday may not be performing as well as we had planned – consistency is key.

• Small investments go a long way.
  You don’t need to invest tens of thousands of dollars every time you invest; small, consistent contributions are much more achievable and will ensure you stay on track and continue on your investing journey.

• Dollar cost averaging.
  This is a strategy that sees you investing the same amount of money consistently over time, no matter what the market is doing, rather than investing lots of money at once. Lots of people automate this process and it’s a really good way of managing investment risk.

If you’re eager to learn more about investing and how to make it work for you, we’d really encourage you to have a flick through the Sharesies blog, which has so much easy-to -understand information when it comes to investing. If you’re keen to learn more about Sharesies and why so many SOTM community members are obsessed with them, you can check them out here.