4 Common Budgeting Mistakes
- No specific motivation
- Unrealistic spending estimates
- Overlooked expenses
- Too many restrictions
As an investor, now may be a good time to concentrate on the long term as a means to reducing the short-term effects of market volatility. Here are several investment strategies that may help you achieve this objective.
Diversification. Most investors understand the importance of diversification; by spreading your portfolio amongst investments of differing styles and objectives, you may potentially reduce the risk of significant loss should one issue underperform. But simply spreading investments around in a random fashion may only create the illusion of diversification and be counterproductive to meeting long-term goals. Carefully look at each of your investments — including those in your Discover accounts — to be sure they complement each other and are not redundant.
Dollar cost averaging. Successful long-term investing often requires discipline and a levelheaded approach. With dollar cost averaging, you invest a fixed amount at predetermined intervals (e.g., monthly). When share prices increase, you buy fewer shares. And when share prices decrease, you buy more shares. Ultimately, this strategy may lead to a lower average cost per share while helping reduce the emotion and guesswork typically associated with investing.1
Buy-and-hold investing. After you purchase an investment, you essentially have two choices: you can either hold on to the investment or you can attempt to time its sale based on market expectations. On the surface, market timing sounds intriguing — perhaps even a bit exciting. But in reality, predicting market moves is difficult, if not impossible. Buying an investment and holding it for the long haul can help keep you focused on your goals and reduce the anxiety that often is experienced with market timing.
Although market volatility has reached historically high levels in recent years, similar periods have come and gone. And to make matters even more interesting, there has been no easily discernable connection between short-term volatility and historical market returns. By maintaining a long-term focus, you may better position yourself to meeting your financial goals. And with a Discover Individual Retirement Account (IRA) CD, you’ll get the peace of mind that comes with guaranteed returns and the maximum level of FDIC insurance allowed by law. A qualified financial professional can help you identify which strategies — and Discover accounts — may be best for your situation.
In addition to offering IRA CDs, Discover also offers an Online Savings Account to help you with your short-term savings goals, a full range of CDs to help you save for the future, and Money Market Accounts that have convenient cash access and a competitive rate. Open an account online in minutes or call our 24-hour U.S.-based Customer Service at 1-800-347-7000.
The article and information provided herein are for informational purposes only and are not intended as a substitute for professional advice.
1Dollar cost averaging does not guarantee a profit nor protect against loss in a declining market. It involves continual investments in securities regardless of fluctuating price levels. Investors should consider their financial ability to continue purchases through periods of low price levels.
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1 “Expenditures on Children by Families, 2015,” Revised March 2017, Center for Nutrition Policy and Promotion, United States Department of Agriculture.
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