When buying Exchange Traded Funds (ETFs), the 4-cycle investment approach can help
When is the best time to buy ETFs?
The answer: It’s quite simple. Rather than investing the entire sum at once, splits the sum into 4 equal parts (25% each) and invest each part every 3 months over the course of one year.
|Example: Total investment 10.000 EUR|
|1 January – First part: 2.500 EUR|
|1 April – Second part: 2.500 EUR|
|1 July – Third part: 2.500 EUR|
|1 October – Last part: 2.500 EUR|
Example schedule to buy ETFs:
Spreading the planned investment over the course of one year allows for avoiding seasonal and temporary fluctuations. Given that ETF prices do fluctuate, the 4-cycle investment approach reduces the risk of buying at the wrong time and thus diversifies the risk.
And even better: With the 4-cycle investment approach, there is no need to wait with buying your first ETFs. But you can do it today. Like I did back in 2015 when I bought my first ETFs. If you are interested, you can see my investment history.