Money, Lightning Bolts and Method Of Average Uniform Investment
If you have decided to give 100% to investment in the security market! The program of average uniform investment will help you to make your first steps in stock market and considerably increase your cash investment.
This method consists in that the investor buys a kit from securities constantly for the identical sum, and at regular intervals. It allows the investor to buy securities in the market and to create the capital, avoiding serious financial errors.
As the market is subject to price fluctuations, buying an identical amount of money on a maxmum market you buy smaller quantity of securities, and on a minimum, on the contrary greater amount. As a result, your price of purchasing all time will be averaged, and it gives priority before if to make purchasing for entire sum at once.
Buying for entire sum at once, the person can get to the adverse period of the market which can’t be predicted. And when the next decrease in the market begins, the person tests negative emotional experiences. And when these emotions start to bring an intolerable pain, the investor, without having sustained them, hastens to get rid of securities selling them during the adverse moment.
Thus he loses a considerable part of the capital because buys expensively, and sells cheaply. Then the market safely having endured falling is developed and begins the next growth. The investor feels disappointment from such activity and makes decision never to contact it. Thus he loses possibility on the present to become rich and financially free.
If you the beginning investor in stock market, time is necessary for you to adapt for new conditions. And if you want to make without serious consequences you should get used to thought to hold money in securities, easy to endure price market fluctuations, it is necessary for you to begin with the small sum, gradually accumulating investment capital.
The sum which is necessary for investing regularly the person find for itself independently, proceeding from the personal financial plan. As a rule, this sum constitutes no more than 10-20 percent from monthly incomes of the person or a family. And investment term gets out not less than for 5 years.
It is possible to present work of a method of average uniform investment visually on an example of purchasing of fruit at various times year. We will assume that cost of fruit always changes, depending on a season. We will admit, you buy regularly 1 kg of fruit in the spring, in the summer, in the autumn and in the winter. In the sum for 4 kg you have paid 8 dollars. But, if these 8 dollars to divide into 4 seasons and in regular intervals to buy for this sum of 2 dollars so much fruit, how many it to turn out, as a result at you it will appear the purchased fruit on 3,75 kg more than in the first variant. Fine, isn’t that so!!!
The conducted researches in stock market of the USA have shown that this method gave positive results on each 10 summer interval of time. For studying were 23 ten years’ periods with 1919 for 1952 are taken. Average investment profitability in the end of all these periods has constituted 21,5 %.
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on November 9, 2010. Filed under 
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