Grow a Pair and Buy Some Stocks

Fear it at its height in the market. Smart people are going to start dollar cost averaging into stocks right now.

Crazy you say? Good. I hope you think it’s crazy. Because when everyone is selling, there comes a point when everyone has sold. In other words, the market cannot go down more if everyone who wants out is out.

That’s when guys like me make a killing.

Here is how it works. Since it is impossible to pick the exact bottom, you put in a set amount of dollars each month. If the market goes down further, you get more shares. If it goes up, you get less shares. Just keep the dollar amount the same. The average share price ends up being very low, and you look back and say it was a bargain.

How much to put in? Whatever amount you can invest in the next year, divided by 12. If you foresee twelve thousand dollars of investing in the next year, put in one thousand a month. Don’t get greedy if the market recovers–don’t put it all in at once. Don’t get fearful if the market tanks, just buy your set amount each month–don’t sell and get out. Even if the amount is $100, stick to it and you will be rolling in money in no time.

This is part of the midlife financial plan in my book, Have a Great Midlife Crisis. There are at least two other things you should be doing now.

Little did I realize when I wrote the book that everyone was going to be in crisis. I wrote a steady, thoughtful plan for the person who wants to prosper, have a great life and take this crisis as an opportunity to become the person you were meant to be.

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Tags: dollar cost average, financial crisis, financial recovery, how to invest in a recession, investing, recession, stocks

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