In this podcast episode I take a look at the benefits of pound cost averaging.

When investing, market volatility can often cause rash decisions that can often be unnecessary and harm your long term outlook while trying to achieve short term peace of mind.

This is why it’s important to take a 10 year or more view to enable cool-headed rational responses to sharp financial movement in either direction.

Key Takeaways

  • Trying to second guess events and make bets on them rarely pays off and deters many from investing.

  • A safe option for risk averse investors to undertake is to save regular amounts which enables the avoidance of trying to second guess market movements. This is Pound Cost Averaging.

  • Rather than a single, risky lump sum investment you drip feed investments over a longer period effectively reducing the risk of loss by minimising the size of the investment at any one time. Any negative event will not influence large amounts of your money.

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