Get Rich Slow Club 03. How to choose between investing strategies
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Apr 17, 2023 Exploring different investing strategies like Dollar-Cost Averaging vs. Lump Sum Investing, Buy and Hold, Dividend Investing, Index vs. ESG Investing. Discussing inflation's impact on investments, diverse portfolio allocations, and the significance of financial literacy. Emphasizing the importance of understanding timeframes for investing goals and the benefits of long-term investing.
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Dollar-Cost Averaging
- Dollar-cost averaging (DCA) involves investing a fixed amount regularly, regardless of price.
- This strategy helps reduce the impact of market volatility by averaging out your purchase price.
Lump Sum Investing Performance
- Lump sum investing, while seemingly riskier, can outperform dollar-cost averaging.
- Studies show lump sum outperforms DCA 75% of the time for stocks and 90% for bonds.
Buy and Hold Strategy
- Buy and hold involves purchasing investments with the intention of holding them long-term.
- This strategy relies on the general upward trend of the market over time, despite short-term fluctuations.