The Importance of Investing Regularly: Dollar-Cost Averaging?

Today, we're diving into the wild world of investing and why trying to time the market is like chasing a falling knife—you might get lucky, but more often, you're just gonna end up with a cut. The Importance of Investing Regularly: Dollar-Cost Averaging? Seriously, we unpack a listener's question about whether it’s better to wait for the perfect moment to invest. Spoiler alert: that perfect moment is a myth, my friend. Instead, we’re all about dollar cost averaging—investing a consistent amount each month, no matter what. So, grab your coffee, kick back, and let’s chat about how this simple strategy can help you ride the market waves without losing your cool or your cash!

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Ever tried to catch a falling knife? Yeah, it sounds risky, right? That’s how we kick off our chat today, diving into the classic Wall Street proverb about market timing. Spoiler alert: it’s super tricky! We got a listener question that really hit home: this person feels like they’re just never gonna nail that perfect moment to invest. Newsflash, folks! I think many of us live in this fantasy land where we think we can predict the market like some crystal ball-wielding wizard. But guess what? Markets are like roller coasters—up, down, all around! Instead of waiting for that dreamy moment, let’s talk about a much easier strategy: dollar cost averaging. Imagine investing the same amount each month, no matter if the market is flying high or taking a nosedive. It’s like ordering your favorite pizza every Friday—sometimes you get more slices, sometimes fewer, but you’re still enjoying that pizza, right?

Takeaways:

• Timing the market is a fantasy; consistent investing is the real deal we need.
• Dollar cost averaging helps you ride out the market's wild ups and downs, no stress.
• Don't let greed or fear mess with your investments; stay steady and watch it grow.
• Every month, invest the same amount, just like getting that Friday pizza, and chill.

Links referenced in this episode:

• financiallyconfidentchristian.com

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Episode Transcript

(00:00):
I thought I'd start today'sshow with a Wall street proverb.
Yes, Wall street has proverbs.
I was kind of surprised tofind this out, but it's going to
make sense here in a second.
Trying to time the market islike trying to catch a falling knife.
You might get lucky, but moreoften you just end up bleeding.
That was a great proverb tostart with today.

(00:20):
Which leads me right into agreat listener question we got today.
This question said this, Raf,I feel like I can't time the market
right.
Should I wait for the perfectmoment to invest?
I said, well, you know, that'san interesting idea.
And as I unwound this a littlebit, time in the market, I thought,
wait a minute, time in themarket, what are they really talking
about here?

(00:41):
Perfect moment.
And I've listen, right now,I'm gonna tell you right now.
When I read this question, Isaid, truth is, I think this person's
living in fantasy land.
Can you really time the market?
Can you really find thatperfect moment?
Not in my reality.
And see, the truth is this,markets go up, markets go down.
That's just the truth.
But what if you invested thesame amount every month no matter

(01:02):
what the market was doing?
Well, that's what I'm going totalk about on today's show.
I'll talk about the power ofdollar cost averaging.
We're going to dive in that today.
This is Financially ConfidentChristian, your daily dose of gospel,
grounded insight and faithdriven tips to help you break the
cycle of financial shame with confidence.

(01:24):
Well, thank you for joining meas we continue our investment journey
together.
Covered many topics in thisarea, haven't we?
And the truth is, for 30 yearsI've guided clients in this very
type of issue.
Many clients that I'vediscussed the benefits of investing
over chasing that perfect timing.
So many people do they, oh,I'm getting that perfect timing,
Rob.
It's going to be great.
I'm going to get into theright moment.

(01:44):
I'm going to make a killing.
But I'm going to tell youright now, it doesn't always work
that way.
And I've personally used thisdollar cost averaging in my own investments
because there are times whenthe market feels like a storm.
Right now there's a huge stormgoing on all around us, all over
the world.
But the market's very muchlike that as well.
But this dollar cost averaginghelps you ride out those market swings

(02:06):
with peace of mind.
I want to contrast two clientsthat I've worked with.
I once worked with this oneGuy, he said, ralph, I am going to
get in the market at theperfect moment.
I have been studying this,I've been, I've been researching
Ralph.
I'm going to wait until it'sthe perfect moment, end up sitting
on the sidelines for yearsbecause guess what, he never found

(02:28):
that perfect moment.
And because he was on thesidelines, he missed major growth
opportunities.
I'm talking about major growth opportunities.
But then I had this otherclient, not a real sophisticated
investment type person, butshe invested every single month,
man.
She said to me, ralph, shegoes, one thing you can count on
with me, I'm going to put myinvestment in.
I don't care what the market's doing.

(02:49):
Ups and downs, sideways, frontways, doesn't matter.
Who do you think ended upbetter at the end?
Well, that person thatconsistently invested monthly got
through the ups and downs andguess what?
They built a stronger portfolio.
My brokers always tell me this.
He says, ralph, buy the dips.
Well, obviously if he'stelling me that, guess what that

(03:09):
means?
There's going to be ups and downs.
The founder of Vanguard, JohnBogle, said this, and I thought this
is so important to share withyou today.
Time is your friend.
Impulse is your enemy.
I want to repeat that againbecause it's so valuable today.
Time is your friend.
Time in the market being consistent.

(03:29):
But what's the warning here?
Impulse is your enemy.
So that's the key.
You got to use time in yourfavor and avoid that impulse feeling.
So I thought I might startwith an analogy.
Most people like pizza.
So think of a pizza, let's sayevery Friday.
Your deal is you go buy a pizza.
Cost you 10 bucks.
Now, I'm not sure we can get apizza for 10 bucks in the United

(03:51):
States anymore, but let's justsay you go buy a pizza for 10 bucks
every Friday, same price every week.
Well, here's the deal.
The way that this stock marketaveraging works, think about a pizza.
When costs rise in the market,you get fewer pizza slices.
It's really that simple.
But then when the costs comedown, guess what bonus?

(04:11):
More pizza slices.
But what's the moral of thestory here?
Either way, it's Friday, youget to eat pizza.
Marketing works the same way.
The market works the same way.
What we're talking about hereis really, really simple.
I'm a narrow down.
I like to talk things inlayman's terms.
Simple terms, you're playing averages.
And dollar cost averagingtakes timing off the table.

(04:34):
Like Vogel said, move awayfrom timing.
You don't need to Guess anymore.
You're not gambling anymore.
And with this type ofinvestment strategy, you buy more
at lower prices, which helpsyou lower your average cost.
And that approach helps youkeep from panicking because listen,
the markets are going to dip.
What's assure this in life?
The markets are going up and down.
But here's the other side ofthis is why I want to really cover

(04:55):
this today.
It also keeps you from gettinggreedy when they rise, it's so easy
to say, wow, the market's up,man, I got to jump in and sell everything
now.
Be careful of that.
Works the same way.
You want to eat every Friday,you want to have that pizza every
Friday.
Some days are going to be moreslices than less.
Same 10 bucks.
Over the years, steadyinvesting compounds into real growth.

(05:15):
It's all about that faith andpatience working together.
And think about this, a littlebit of a biblical analogy that that
small, faithful sowing, thatfaithful, consistent investing, it
leads to steady reaping downthe road.
That's what we're all lookingfor because scripture reminds us
of this.
Consistency, diligence, faith.

(05:36):
Let's get right into the scripture.
I got a strong and powerfulverse from the book of Galatians
today.
This is from chapter six,verse seven.
It says, do not be deceived.
God cannot be mocked.
A man reaps what he sows.
Pretty strong, isn't it?
What you sow, what you decideto put into those investments day

(05:57):
in and day out, inconsistency,that's what you're going to reap.
Longer.
How about we pray togetherright now?
Lord, we come to you today.
We just thank you for grace.
We thank you for understandingthat we sometimes do get greedy,
Lord, and we get impracticaland we want to time the mark.
We want to do all those thingsthat you warned us against, Lord.
So today we just ask you togive us diligence, Lord, to keep

(06:18):
investing consistently infaithful stewardship, Lord, and we
just trust your wisdom andhelp us to ignore the fear and that
greed that comes into ourminds as fleshly people, Lord, and
we just thank you for teachingus the value of that steady faithfulness.
And we ask all of these thingsin the name of Jesus.
Amen.
So here's my one action stepfor you today.

(06:40):
Really simple.
Today I want you to just thinkabout a fixed monthly investment
amount and commit to it.
Just like that Friday pizza.
I want you to commit to howmuch you're going to put into the
market, regardless of market condition.
Now listen, you don't have toput it in the market.
You can put it in a savingsaccount, you can do it in your investment,
whatever you want to do it, itdoesn't really matter.
But think about doing it andbeing consistent with it.

(07:02):
Because when you do that,you're building the average and you're
building wealth.
No more living in fear of thedips in the market.
No more trying to time themarket as like I said earlier, living
in fantasy land.
So that's my encouragement foryou today.
Just one simple thing, oneother thing you can do for me is
share the show.
One of the ways I'm trying todo is I'm trying to grow the show.
A lot of people out there arelooking for this wisdom.
They're looking for thatfaithful finance, how to, how to

(07:24):
get to peace and how to get to confidence.
Well, if you share the show,you can be an ambassador for the
show.
Just send them to our website.
That's financially confidentChristian.com say, hey listen, I
got this guy Ralph, I listento every day, got some great ideas.
We're doing this 30 dayinvestment series.
You should check it out again.
That's at financiallyconfident Christian.com and remember
this, you don't need to timethe market to succeed.

(07:46):
Stop playing those games.
Stop playing the trying tochase after those falling knives.
You don't need to bleed to invest.
Use that dollar collegeaveraging to remove that emotion
and build that consistency.
And it's like I said, thosesmall steady investments, they compound
into long term growth.
And it's that faithful sowingthat leads to steady reaping.

(08:08):
So let's today remove thatemotion and tame that greed.
And I just want to encourageyou right now, you can do this.
You don't have to live in fear.
God hears your prayers.
I just encourage you rightnow, stay financially savvy.
Go live as a financiallyconfident Christian.
God bless you.
And you have a great day today.

(08:32):
Ra.