Even though the market's a mess, I'm still planning to invest thousands of dollars this month

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Even though the market's a mess, I'm still planning to invest thousands of dollars this month

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The author is not pictured.

 
  • The stock market has been swinging wildly in response to the coronavirus pandemic, but I'm not letting that volatility disrupt my investing plans.
  • I'm only 25, so I have decades before I'll need the money I've invested to fund my retirement.
  • I know that the market also rises over time, so I'm staying the course and will be investing several thousand dollars this month as planned.
  • SmartAsset's free tool can find a financial planner to help you take control of your money »

The stock market has been volatile in recent weeks, to say the least. With plummeting stock prices, it can be scary for investors to stay the course

In fact, many investors are selling out of the market - but they're realizing large losses that could be difficult to recover from. 

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Like everyone else, I've been more concerned about the market lately. But through all of this, I am continuing to invest my money

Volatility in the market is nothing new

The stock market has been known to swing up and down based on the current economic climate. When everything is going well, stocks rise. When the world is going through a difficult time, stocks fall.

The COVID-19 pandemic is the definition of a tough time for people around the world. Not only is the health of millions at risk, but the economy is in jeopardy, too. 

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Currently, we are experiencing a very steep drop, but it is not completely unprecedented. I know that, in the long run, the market always rises - so I'm not worried about continuing to invest now since I have a long time horizon before I'll need my cash.

Timing the market is never a good idea

With the unpredictability of the market, experts warn investors against trying to time the market. We've all heard the advice that time in the market is better than timing the market. Although it can be tempting to try to buy low and sell high, the vast majority of investors are unable to pick out the highs and lows accurately - me included.

I know that I do not have the time or energy to meticulously track the factors that could lead to falling prices. For my investment strategy, I have decided to simply invest as much as I can, whenever I can. I just buy when I can and intend to hold onto those shares for the next several decades. 

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I believe in the idea that the market will always rise in the long term, so I'm not worried about current conditions when I push more money into the market. 

My investment plans are long term

My investment strategy is to buy and hold low-cost, broad-based index funds throughout my investment career. Whenever possible, I steadily invest more and more money into the market. I am not planning on using any of the funds that I have invested until I am ready to retire. Since I'm turning 25 this month, my retirement date is at least 30 years away. 

With that long investment timeline in mind, I am trying not to focus on the current market drop too much. I did my homework before I started investing and learned that the market was likely to drop dramatically at several points over the next several decades. 

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My eyes were wide open to the possibility that I could even lose a significant amount of money. Even with all of that information, I chose to invest and  prepared myself for a bumpy ride. I couldn't have predicted that a precipitous drop in the market due to a global pandemic would happen in the early days of my investment strategy. However, I did expect some significant drops along the way. 

Because the current market drop is something that I had steeled myself for well in advance, I am continuing my investment strategy as planned. I am continuing to buy low-cost, broad-based index funds. I try to buy my funds on a monthly basis using a dollar-cost averaging strategy, so I will not be skipping March 2020. Instead, I will move forward with my planned investment of a few thousand dollars. 

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