Some investing principles, such as regular investing, work so well they're considered core to your success. Automatic investing is a smart and easy way to make regular investments, and may increase your chances of achieving financial success.
- Eliminate the guesswork. The market will have its ups and downs, but automatic investing may help keep your investments on a steady course.
- Let market swings work for you. Invest a set amount every month and you'll buy more shares when the price is low and fewer shares when the price is high. (This strategy, known as dollar cost averaging, does not assure a profit or protect against loss in declining markets. To fully take advantage of dollar cost-averaging, you should be prepared to continue investing at regular intervals, even during economic downturns.)
- Put time on your side. Investing a little now may return a lot later. This graph illustrates the effects of investing $50, $100 or $200 monthly.Hypothetical results are based on a $2,500 beginning balance, investments made at the beginning of the month and an 6% average annual return. All projections are before taxes. This chart does not represent the performance of any specific investment product.
Hypothetical calculation of $2,500 initial investment and monthly investments over 30 years earning a rate of 6% annually. Assumes reinvestment of all gains, dividends and interest, and does not include fees, expenses, or taxes. If all taxes, fees, and expenses were reflected, the reported portfolio value would be lower. Source: American Century Investments Time/ Value Calculator. ©2016 Standard & Poor’s.