The long list of economic problems around the world — from high unemployment and legislative gridlock in the United States to deep debt problems in Europe — makes these scary times for investors, Paul Sullivan writes in his Wealth Matters column this week. The usual advice is to focus on a long-term plan and not abandon it when the times get tough.
But Paul notes a new study that raises questions about another standard piece of investing advice — investing money regularly over a period of time. This is the type of investing, known as dollar-cost averaging, behind 401(k) plans. The idea is that regular purchases reduce the risk of investing a large amount in a single investment at the wrong time.
But the new study, from Gerstein Fisher, a New York money manager, found that investing a lump sum yielded better results over a 20-year period than investing the same amount of money in equal amounts over 12 months. “The faster you invest the money the better you do,” Gregg Fisher the president and chief investment officer of Gerstein Fisher, told Paul.
What is your investment strategy? Have you found a way to ride out the market?
Article source: http://feeds.nytimes.com/click.phdo?i=c9117824937990bef91b4eee921bff90
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