It might seem illogical to keep investing in a crisis but if you\u2019re lucky enough to be in a position to do so, you should definitely carry on.<\/p>\n
The dollar cost averaging strategy of investing is the one which we recommend to most of our clients if they have a sufficiently long investment horizon i.e. a decade or more. It is a very simple strategy which involves investing regularly – e.g. every month – no matter what the markets are doing<\/strong>. Even now, while we are in the midst of a global pandemic which has triggered record stock market falls.<\/p>\n There are two aspects of the dollar cost averaging approach which are particularly reassuring when the investment landscape is bumpy. Because you have already made the decision to invest regularly over the long term, whatever share prices are doing, you don\u2019t need to worry about whether you should be buying or selling. Your investment approach was decided expecting some rocky times so you can ignore the negative market noise and carry on just as you have been, sticking to your long term strategy.<\/p>\n The second positive is that while prices are low you will be getting more bang for your buck which means more gain when the natural cycle of the market triggers the inevitable upturn.<\/p>\n There is a proviso to all this though. Quality is key and you need to take extra care over your choice of investments.<\/p>\n We\u2019ve been quoting Warren Buffett a lot recently but in the midst of a crisis, when we want to be minimising risk, it makes sense to take investment advice from someone who has been at the top of the game for a long time and seen just about everything the market can throw at us. So here\u2019s another golden nugget from the Oracle of Omaha:<\/p>\n