In our previous article, we explained how a diversified portfolio helps reduce your exposure to risk. Now, let’s see how regular investing can boost your wealth over the long term. You can create your Investment Plan in the app and start investing on a regular basis.
Eat, sleep, invest, repeat
Not everyone has a lot of starting capital to invest. The good news is that you can build long-term wealth, even with a small investment. The important thing, however, is to invest regularly.
Instead of trying to time the markets and guessing the perfect moment to invest (which is very difficult), you can simply make a regular investment at the same time, every week or every month until you reach your goals.
Remember, investing isn’t a sprint, it’s a marathon, and investing regularly can help you stay the course. You can also be flexible and increase or decrease the amount if your goals or financial situation change.
The cost-average effect
Investing regularly creates a ‘cost-average effect’. Let’s say you want to invest in a stock and you have a set amount of cash available each month. If the shares are down one month, you’ll get more shares for your money. If the stock is more expensive next month, you’ll get fewer.
Over the years, it will balance out your cost to an average price. So, choosing exactly when to invest is much less important.
And don’t forget, you can also count on compound interest (or interest on interest) which will help your investment grow over time if you are patient.
So far we’ve learned that investing regularly allows you to get started with small amounts, diversify your portfolio, compound your interest and get exposure to the cost-average effect. So, what next?
On BUX, you can create a personalised Investment Plan with ETFs and stocks. Just go to the app and tap on ‘My Plans’ from your Portfolio page. Then you can add the ETFs and stocks you want and set a monthly budget. We’ll execute your plan automatically, each month, for a €1 fee, no matter how many assets you have in your plan.
Test your knowledge
What does the cost-average effect do?
You can customise your Investment Plan with fractions of stocks and ETFs, then we’ll automate it, to help maximise your returns. Learn more about the Investment Plan.