Investing doesn’t need to be as complicated as everyone makes it out to be. All you need to keep doing is dollar cost average into quality assets, then rarely sell. I’ll break that sentence down.
DOLLAR COST AVERAGE: DCA
Dollar cost average means just keep buying. You buy small amounts over time. You don’t worry about valuation. You just buy x% (keep it small, 5% or less) of your final target position, then do the same the next month, etc… Spread your purchase over a year or more. A more in depth explanation can be found HERE. This is done as risk management technique.
A quality asset can be a lot of different things. To keep things very simple, index funds would be a great quality asset to start with. Keeping it simple like $SPY, $QQQ or even $ARKK. Heck, buy all three. You could also DCA into individual stocks. This would be riskier, but it makes sense for some people. Individual stocks require a lot more work, due diligence and skills. I recommend either starting very small or doing a lot of research before you start with individual stocks. Personally, I think Bitcoin could be another quality asset, but it clearly comes with a ton of risk. Above all, just make sure you are buying something you think you will hold for the next 20 years.
You just keep buying, then you don’t sell. Sometimes you need to sell (to buy a house, etc…), but the idea is you only sell if you need to. Do your research up front, diversify your risk (most index funds do this for you already) and then sit tight.
My investing philosophy essentially comes down the below two things:
- Dollar cost average into quality assets, then rarely sell
- just keep buying
It’s simple, but it should be. Everyone should be investing and anyone can do those two things.