This week’s rally on the stock market emphasized one investing principal that we should all take time to remember: consistency.
It was just two weeks ago that the market dropped so much during a one week period that all of the gains from 2012 were completely wiped out. Now the markets just capped off the best week of the entire year.
The S&P 500 rose 3.73% in the past five market days.
With the markets going up, down, up, and down again, how can the investing principal be consistency?
For me it is the reminder to consistently be investing in the market.
My wife and I have our Roth IRA contributions coming out weekly now rather than monthly. That means some weeks the price is higher than the price we paid last week, and other weeks are on the other side of the equation.
But we’re investing and building up shares in our index mutual funds for the long run. This type of consistency makes it easy to shrug off the worst week of the year followed by the best week of the year because we know, eventually, there will be another worst and best week of the year. As long as we’re building up shares and the market goes up over time — which, historically, it has — then we come out ahead.
Want to forget about the ups and downs of the stock market? Here are some great reads:
Get Rich Slowly | Financial Education for Fifth Graders
The Finance Buff | Professional Help vs Do It Yourself
CNN Money | “Safe” Investments That Are Actually Risky
Financial Highway | 5 Things Your Credit Card Issuer WANTS You To Do
Wise Bread | Free Online Tools That Help Organize People
Money Saving Enthusiast | Control Your Finances: Do You Make These 3 Mistakes When Paying Bills? –
Bloomberg | Too Much Faith in Markets Denies Us the Good Life
My Super-Charged Life | Budgeting Obstacles: Breakthrough to Freedom
Making Sense of Cents | Building Credit
Personal Dividends | A Basic Overview of the AMT
Millionaire Corner | Financial Fitness Part 1 – Excercise Your Credit – Wisely
NPR’s Planet Money | What America Spends on Groceries
Boomer and Echo | Certain World Events Spark Totally Irrational Behaviour
Smart Military Money | Newlyweds Can Avoid Owing Next Tax Season
Five Cent Nickel | Extreme Credit Card Collections
Moneyland TIME | CFPB Looks Into Credit Card Provision Harming Stay-at-Home Spouses
Free From Broke was featured in the following carnivals this week:
Festival of Frugality #339 – Frugal Living Summer Edition
Tax Carnival #103: June Tax Swoon – Don’t Mess With Taxes
Carnival of Personal Finance #364 – The Art of PF Blogging Edition | One Cent At A Time
The Carnival of Financial Camaraderie #35 – My University Money
I dollar cost average so I get to buy high and low but know that in the end it will all work itself out because I didn’t panic and sell when the market tanks.
Thanks for the mention!
I couldn’t agree more. While a week like this one is gratifying, I’ve found that having a consistent, long-term investment strategy, ideally based upon a financial plan, is key.