Right Place, Right Time: An Investment Strategy

Being in the “right place, at the right time” has led to great opportunities in life for many. Sometimes, the right place and the right time is based on sheer luck, but there are times when you can strategically place yourself in such a position.

When it comes to investing, it may sometimes feel as though a healthy dose of luck is needed; however, there are opportunities to be strategic and to place yourself in the right place to take advantage of opportunities. Some of these opportunities occur during the fall of the stock market, which should be an expected event. Periods of decline present an opportunity to accumulate more shares of quality companies or funds. The key is to make sure you are in a position to take advantage of these opportunities when they present themselves.

Budgeting for investing and Dollar Cost Averaging (DCA) are two ways to ensure you are in the right place at the right time.


With DCA, you invest a set amount of money at a set frequency, regardless of how the stock market is performing. For example, let us say you invest $50/month in mutual fund XYZ. When the stock market is down, your $50 investment goes further because you are able to accumulate more shares of XYZ. In DCA, your focus is on accumulating shares, and remaining disciplined with your chosen investment strategy and allocation.

The second way to take advantage of buying opportunities is to budget an amount of money for investing and accumulate the cash in your investment account. During periods of market downturn, when stocks and funds are “on sale”, you will be in a position to take advantage of the market downturn with a one-time purchase using the cash you accumulated.

Regardless of the method you choose (accumulating shares or accumulating cash), the goal is to plan ahead so that when an opportunity presents itself, you are in a position to take advantage of it.

To help you recognize a buying opportunity, create a watchlist with your current brokerage account, or a portfolio of stocks and funds of interest using Yahoo finance or Google finance. Both require a yahoo mail or gmail account.

See this easy infographic for further information on  a DCA strategy.

DCA only graph

 


 

Ramat Oyetunji
Passionate about achieving financial independence and eager to help others on their journey to financial independence.

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