Investing in the stock market is great because your returns can compound over the long run. But this process takes time. Remember, stock investing legend Warren Buffett didn't become a billionaire until he was 55. But now, less than 40 years later, he's worth closer to $100 billion. Therefore, the sooner you get started, the better.
But the stock market regularly falls. For example, the S&P 500 has fallen by more than 10% on five occasions over the last 20 years. The trouble is, you never know when a crash is imminent or whether now is a temporary peak. Therefore, to overcome the futile exercise of timing the market, you can spread investments out using dollar-cost averaging, investing a set dollar amount over time. That way, you can overcome trying to time the market and still get compounding working in your favor right now.
Based on this, I believe people should make investing a regularly scheduled event. And I practice what I preach. Over just the past month, I've put my own money to work -- based on a predetermined schedule that works for me -- by starting positions in Lam Research (NASDAQ: LRCX) , Zynga (NASDAQ: ZNGA) , and Upstart Holdings (NASDAQ: UPST) . Here's why investing $1,000 in these three stocks as part of a regularly scheduled plan could be a great idea.
For further details see:
Got $1,000? Here Are 3 Stocks to Buy for the Long Term