04-23-2015, 12:37 PM
Welcome to the forum, Dutchdreamer!
I agree with Chad -- if this is money you need for a house purchase in the next few years, putting it into stocks seems pretty risky. A few years is short-term in the market, and in the short term, anything can happen.
If you are nonetheless convinced that you should buy stocks, the folks here are mostly fans of relatively conservative dividend payers. Large, established companies with dividend yields generally in the 2 to 4 percent range (though there are some notable outliers).
You mentioned "high dividend yield" in your post. If you are talking about more speculative companies with high yields (6 or more percent-ish), then that seems even less prudent if you need this money in the next few years for a house.
It is true that the market generally is at all time highs. But nobody can tell you where it is going from here. With a conservative approach like dividend growth investing -- where the plan is to hold for really long periods of time -- there is more of a margin of error with valuations than with short term trading or other approaches. So again I agree with Chad, time in the market matters, and I would not wait to start monthly purchases if you have a good plan in place and can weather short-term ups and downs.
You've got this generally right. You're talking about dollar cost averaging. If you put the same amount of money into the market at regular intervals, then you take advantage of lower prices by buying more shares, which gooses your average when (if) prices rise again.
Best of luck to you, but please proceed slowly and cautiously. If you are new to the market, start slow and small, and please don't risk money that you need for a specific purpose in the next few years.
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I agree with Chad -- if this is money you need for a house purchase in the next few years, putting it into stocks seems pretty risky. A few years is short-term in the market, and in the short term, anything can happen.
If you are nonetheless convinced that you should buy stocks, the folks here are mostly fans of relatively conservative dividend payers. Large, established companies with dividend yields generally in the 2 to 4 percent range (though there are some notable outliers).
You mentioned "high dividend yield" in your post. If you are talking about more speculative companies with high yields (6 or more percent-ish), then that seems even less prudent if you need this money in the next few years for a house.
(04-23-2015, 11:36 AM)Dutchdreamer Wrote: Is it still advisable to start investing right now with this market?
It is true that the market generally is at all time highs. But nobody can tell you where it is going from here. With a conservative approach like dividend growth investing -- where the plan is to hold for really long periods of time -- there is more of a margin of error with valuations than with short term trading or other approaches. So again I agree with Chad, time in the market matters, and I would not wait to start monthly purchases if you have a good plan in place and can weather short-term ups and downs.
(04-23-2015, 11:36 AM)Dutchdreamer Wrote: However, if I use the strategy to invest 500 euro's every month I think it doesn't really matter how the market is behaving. If I keep investing money when the market falls, it evens out. Am I right about this?
You've got this generally right. You're talking about dollar cost averaging. If you put the same amount of money into the market at regular intervals, then you take advantage of lower prices by buying more shares, which gooses your average when (if) prices rise again.
Best of luck to you, but please proceed slowly and cautiously. If you are new to the market, start slow and small, and please don't risk money that you need for a specific purpose in the next few years.
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