01 Jul

6 Reasons to Stop Procrastinating and Start Investing

Is anxiety about losing money in a market downturn keeping you from investing? Or maybe you’re waiting for the “right” time to invest — like when you have some extra money. Before you put off investing any longer, consider these six reasons you should invest.

1. Losing money when the markets drop is not the biggest threat to your finances. If you don’t have a substantial nest egg by the time you retire, you run the risk of outliving your money. Inflation poses a long-term threat, too — if your money doesn’t grow to outpace inflation, your buying power falls. It’s far less risky to invest in a well-balanced portfolio than to not invest at all.

2. Your odds of winning the lottery, launching a billion-dollar company or becoming a rock star are slim. As in Aesop’s fable, “The Tortoise and the Hare,” slow and steady wins the race. Building wealth a little at a time over many years may not be as sexy as a sudden windfall or wild success, but it’s a lot more certain. It allows you to control your destiny.

3. You can find a mix of investments that fits your goals, timeline and risk tolerance with the enormous universe of investments available to you. The way you blend investments — your asset allocation — determines the overall level of risk in your portfolio. You can allocate some money to riskier investments with greater potential for growth and some to more conservative investments with less potential for gains, but also less potential for losses.

4. A disciplined approach can help you manage risk — and even use downturns to your advantage. Two strategies can take the emotion out of investing and help keep your portfolio on track toward your goals:

  • Dollar-cost averaging involves investing a set amount at regular intervals, no matter what the market is doing. The result is that you buy more shares when prices are down and fewer shares when prices are up.*
  • Rebalancing means restoring the stock, bond and cash mix in your portfolio to your original target allocations for those asset classes. Over time, as one asset class outperforms the others, your asset allocations will drift away from your targets. To rebalance, you can sell assets from classes that are outperforming the others, buy more of asset classes that are underperforming, or some combination of the two. If your portfolio is not in a tax-sheltered account, be sure to consider the tax consequences of rebalancing.

5. Tax-advantaged accounts can help your money grow faster. To help you save for retirement and college, certain types of accounts come with built-in tax advantages. Accounts that help you save include individual retirement accounts (IRAs); employersponsored retirement accounts such as 401(k), 403(b) and 457 plans; Coverdell education savings accounts; and 529 plans.

6. You’ll find the help you need right here.An investment professional from Navigator Credit Union can answer your questions and help you get started. Call for an appointment today at 228-474-3427!

Dollar-cost averaging (systematic investing) cannot guarantee a profit or protect against loss in a declining market. You should consider your ability to continue investing during periods of low price levels.

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