During January your good intentions for a fresh start in the new year may have started to slip. Fear not, as there’s one resolution that’s super easy to stick with that your future self will thank you for.
Regular investing is the habit to adopt and stick with in 2025. And you don’t even need a large stack of money to make a start.
Instead of saving up a chunk of money to invest in one go, regular investing allows you to drip feed small sums into the markets every month. You can invest as little as £50 each month. As your disposable income increases, you can notch up the amount you save each month.
Here are five excellent reasons regular investing can be a helpful way to grow your wealth.
1. Form good habits
Investing regularly helps you build good habits and keeps you committed to a long-term investment strategy.
Typically, the longer you leave your money invested, the greater the potential rewards. Over time, no matter how little you save each month, your regular investment should mount up.
One way to start is to invest a fixed amount from your income each month. As your income fluctuates over your working life, you can adjust the amount you’re saving in line with your earnings.
2. Benefit from compound growth
Even if the amount of money you’re investing each month seems small, every little counts.
Returns from your regular investments will be reinvested and help your money grow. Thanks to the effects of compound growth, over time, everything you put away adds up.
Compound interest is a powerful tool for investments. Even Einstein proclaimed it to be the eighth wonder of the world.
3. Avoid temptation to “time” the market
Some people will agonise over when they should invest their money in the stock market, hoping to find the ideal moment to buy. This approach is incredibly difficult and, sadly, there’s rarely such a thing as “perfect”.
Even professional investors and money managers with large sums to invest will drip-feed funds into the market over time. As the strategy of seasoned professionals, it could be a great approach for you too.
Instead of trying to buy and sell at the right time, regular investing means you remain fully invested.
4. Reduce risk and smooth out returns with pound-cost averaging
Investing small sums on a regular basis allows you to benefit from “pound-cost averaging”.
As you drip-feed your money into the stock market, you buy shares at different prices. When prices rise, your money will buy fewer shares. But, when prices drop, your money will go further and buy you more.
This means that when stock markets experience a rough patch, investing smaller sums regularly can help to eliminate the effect of volatile markets. Ultimately, over time, you end up buying shares at the average market price.
While there’s no guarantee of achieving better returns than investing a lump sum over a fixed, long-term period, you’ll end up paying the average price of the share. This helps to reduce your risk and provides potentially smoother returns.
5. Prevent emotions driving your decisions
When stock market prices start to fall, many people panic and react. If you’re an investor and get spooked by market changes, you may be tempted to pull your money out of the market or refuse to enter the market until things settle down.
And yet, because fear drives prices artificially low, this is often the best time to buy into the market. At times like these, adding to your investment means that you may enjoy larger returns when the markets rally.
Many people find it difficult to remove emotion from investing. Making regular payments into the market helps to remove an element of stress and uncertainty.
Get in touch
Regular investing is a powerful discipline you can use to help build your wealth, and the sooner you start, the better.
To find out more about how we can help you invest your money wisely and how you can profit from expert insight and long-term growth, email info.wp@titanwh.com or call us on 0800 048 0150.
Please note
The information contained in this article is based on the opinion of Titan Wealth Planning and does not constitute financial advice or a recommendation for any investment or retirement strategy.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
