The share market has been very turbulent this past month or so. In the last week, the troubles at Centro have 'spread' to the entire LTP sector, which was off about 10% earlier this week.
As we have written before, market downturns can test the courage of your convictions. Most of our financial planning clients have been encouraged to use regular 'dollar cost averaging' to make their investments into the share market. It is easy to keep making investments when the market is rising. When the market is not going well, it is an easy mistake to make to 'wait for things to get better' before making your next investment.
Downturns are great buying opportunities - much better than upturns. So, if your regular buying day falls at a time when the market is down, please make the investment regardless. Buying when prices are low has a wonderfully positive effect on your portfolio. Waiting for prices to fall even further is problematic, because no one really knows in which direction the market will move next. Waiting for prices to rise is particularly counter-productive if you are a buyer.
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