One verse in the Bible gives us much of what we need to know about wise investing. Proverbs 21:5 reads, "Steady plodding brings prosperity; hasty speculation brings poverty." It may not be flashy or exciting, but there’s no better way to ensure that your long range investing pays off. We’ll discuss the power of this principle today on MoneyWise. The stock market has been a roller coaster over the past couple of years. We’ve seen many record highs, breathtaking falls, and rapid recoveries. A BIG PICTURE VIEW But to invest wisely, you have to look beyond the short-term ups and downs of the market to take a long term view. You only invest in stocks or index mutual funds with money that you don’t need for at least five years, and 10 years is even better. Don’t allow the short-term market roller coaster to get you over-excited or worried. History shows us that the market always recovers from any downturn and begins to move forward. You can stick to your long range plan. DOLLAR COST AVERAGING The market has another term for steady plodding. It’s called dollar cost averaging. If you contribute a consistent amount each month to your retirement account, you’re dollar cost averaging. That could be in stocks, mutual funds or another vehicle, but here’s the key: You continue your consistent contributions regardless of what’s happening in the market at the moment. Dollar cost averaging provides several benefits: 1. It eliminates guesswork. You’re not trying to figure out what the market is likely to do next month or next year. You’ve already made your investing decisions based on your long range plan. 2. It’s easy to set up with your bank. Once you’ve begun having your contributions automatically sent to your retirement account, you can sit back and relax. 3. You’re always building maximum equity at minimum cost. By investing a consistent amount each month, you’re automatically buying fewer shares when prices are high and stocks are expensive. But when stocks are down and you’re still contributing the same amount each month, you’re buying more shares. Dollar cost averaging doesn’t give you big wins overnight. It gives you long term gains. If you stick with it and don’t pull your money out when things look bleak, those eventual gains can be substantial. And there’s another benefit to steady plodding. Most of us work pretty hard to save and invest. It’s just human nature to have some emotional attachment to those dollars. But emotions are dangerous when it comes to investing. They tend to crowd out logic and reason. Steady plodding - or dollar cost averaging - takes the emotion out of investing. It also eliminates the possibility that you’ll make a bad investment decision, like mis-timing the market. It forces you to think long term. But there is one catch: Dollar cost averaging is a long term proposition. To do it safely, you should have an investment horizon of at least 5 or 10 years. Then, as you near retirement, you’ll want to decrease your position in stocks and mutual funds. Eventually, you’ll decrease stock investments to about 20-percent during retirement. That way you have a hedge against inflation. LISTENER QUESTIONS On today’s program, Rob also answers listener questions: ●Nearing retirement, would it be wise to keep a rental property or sell it and invest the proceeds? ●Would it make sense to refinance in order to draw out money to help a parent buy a home? Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to [email protected] Also, visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app. Like and Follow us on Facebook at MoneyWise Media for videos and the very latest discussion! Remember that it’s your prayerful and financial support that keeps MoneyWise on the air. Help us continue this outreach by clicking the Donate tab on our website or in our app.