Those of you who read this blog regularly will know that I’ve been less than diligent with my posts recently. Baring your soul on the Internet to people you’ve never actually met seems to be the “done” thing these days, so I’ve decided to pull back the curtain and share where I am these days, in terms of my financial worries. Being able to be open about these things (and a possible upcoming career change) is one of the benefits of blogging anonymously, so here we go:
Economic indicators: what they are, and what they tell us
Economic indicators are used to gauge the state of the economy. There are three types of indicators that are considered when looking at the economy: past, present, and future. These economic indicators are referred to as lagging, coincident, and leading indicators, respectively. Here is a quick and dirty explanation of each, along with a few examples.
Dollar cost averaging is one of the most powerful concepts that affects you as a retail investor. It is also one of the simplest, most effective, and virtually idiot-proof ways to get both time and math working for you.
You get time working for you, because regardless of how much money your have to invest, you can get started right now. Because you choose the amount you are able to invest, dollar cost averaging also allows you to make regular investments at a level that you can afford throughout the year. Once making these investments becomes one of your monthly money habits, you won’t even notice the “missing” money. Consider it a monthly bill; one that must be paid not to a bank or utility, but to your future self.
Dollar cost averaging gets math working for you because you automatically buy more shares when stock prices are lower, and buy fewer shares when stock prices are higher.
Dollar cost averaging in action
Lets look at an admittedly simple, but illustrative, example: Continue reading Dollar Cost Averaging