Before investing in any dividend stocks or cryptocurrency, you need to have established a system where a flat/fixed percentage of your active income is set aside for investing.
Then you need to spend time and put in the effort to understand each stock or cryptocurrency, the problems they solve, the products they have, how they establish their dominance (moat) that sets them apart from their competitors and how they plan to be future proof etc.
Once you have established that, you should have a list of top 10, then you start to allocate funding for each of the listed stocks and cryptocurrency that you have researched and understood.
There are a few ways that investors invest:
- periodical dollar cost averaging (DCA)
- timing the market
- buying the dip
This article is about buying the dip, but let’s cover all three
Table Of Contents
PERIODICAL DOLLAR COST AVERAGING (DCA)
This is my usual way of investing.
I set aside X amount every month/quarter, and once the amount is enough, it’d automatically be dispersed across my cryptocurrency and dividend stock portfolio.
Regardless if it’s “high or low”.
The dollar cost averaging is based on consistent investing throughout periods of time, so that after 5-20 years, your amounts invested would have a “blended amount” of ups and downs that will equal out to be averagely alright.
This way is easy, brainless, and I love it.
Especially for Index Funds investing.
TIMING THE MARKET
Usually I shrug when people tell me that they want to time the market, because “entry point” is very important.
And it IS!
…just that, given the fact that I have a busy life and schedule (business, kids, family, church etc) – I don’t have time to time the market. Which explains my love and preference for dollar cost averaging (DCA) approach above.
If you’re trying to time the market, why it’s difficult is because we don’t have crystal balls to read the future – it’s really too open-ended, and you’d end up “waiting too long”.
If you have time, then fine.
If you don’t then don’t do so.
BUYING THE DIP (SORT OF TIMING THE MARKET)
ONE way I “sort of” time the market: I keep my ears and eyes peeled for bad news, scandals etc, which almost always causes prices to slide. Then, I buy in gradually along the slide eg if I have $5000 to buy into a cryptocurrency that is priced at $1000.
I will set buy criteria to buy at $900, $800, $700, $600 etc.
This will allow me to buy on a slide-gradual basis, and gives me an “average downhill price purchase” BECAUSE we don’t know when is the rebound/hard floor.
But it requires steady hands and heart, because when people are selling, and you plan to buy, it can be scary.
But if you’d spent time and put in the effort to understand each stock or cryptocurrency, the problems they solve, the products they have, how they establish their dominance (moat) that sets them apart from their competitors and how they plan to be future proof etc – this will be your guide and conviction
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I’m the founder and writer here at NigelChua.com; as well as serial entrepreneur, therapy business entrepreneur, digital entrepreneur, investor and also happy husband, father and Christian.
I love good success and freedom and learned early in life on importance of making more and entrepreneurship. Started and sold off a business for 7-figures; built another 7-figure one and growing it further, as well as building/investing into other businesses and investments as well as advisory works.
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