The Benefits of regular monthly investment during highly uncertain markets
Updated: Mar 10, 2021
Taking a real example of this crisis. Below is the graph of the S&P 500 Index that has peaked on 19th February this year before starting a 33 percent descendant in just 22 working days, the fastest drop ever in history.
The index measures the stock performance of the 500 largest US companies and it is one of most commonly followed equity indices.
Assuming you had invested at the worst time, at all-time high price on 19th February, the first $3000 and then continued the following months to invest $3000 per month on 19 March, 19 April and 19 May.
Even though the S&P 500 Index is still 10% down from the peak, you would have made a 7.46% growth in just over 3 months because of buying every month at a cheaper price.
Therefore, if you think the next quarter will be negative and volatile, it is a rare opportunity, that happens about once in 10 years, to start your monthly investment now to take advantage of future volatility to generate growth.
This can be achieved without timing the market while removing completely headaches, stress and drama.
The average annual total return of the S&P 500 index, including dividends, since inception in 1926 is about 10%.
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