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Dividend Reinvestment Plan Explained 

Dividend Reinvestment Plan Explained 

Written by R. A. Stewart

A Dividend Reinvestment Plan, (often called DRIP or DRP) is an automated way to grow your portfolio by reinvesting dividends into the same company instead of receiving cash.

It is the same principle as investing for compounding interest.

Think of it as putting your money to work as soon as it is earned.

How a DRIP works

When a company you own shares in pays a dividend, you have two choices:

  1. Cash Payout: The money is paid into your brokerage or bank account.
  2. Reinvestment: The money is used to purchase additional shares (or fractional shares) in the same company.

Most major brokerages and many individual companies offer these plans. In many cases you can “opt-in” through your account settings and the account settings handles the rest.

How it Grows Your Wealth

When you opt into a Dividend Reinvestment plan you are not just owning more shares-its in the snowballing effect over time.

There are three key benefits.

  1. The Power of Compounding

Any dividends which are reinvested into the company will earn dividends during the next cycle which can accelerate your holdings in the long-term. An example is that you own 100 shares in a company. They pay a dividend and the dividend is converted into shares. You now own 102 shares.

  1. Dollar Cost Averaging

DRIPS purchase shares at regular intervals and this means:

(a) When the market is down you purchase more shares-its

(b) When the market is up you purchase fewer shares.

It all balances out in a year which mean that you are practising dollar-cost averaging.

  1. Reduced Fees and Discounts

There are reduced fees because you are purchasing more shares without the need for the normal transaction fees. 

It will pay to check on the conditions of the brokerage firm or the online platform where you have invested your money because not all of them are the same. 

Important considerations

DRIPS are a powerful tool for wealth-building, there are some things to consider.

Taxation: Dividends reinvested are still considered taxable income of the year that they are received even if you did not receive them in the form of cash.

Stock Imbalance: If a company pays a high DRIP then you could end up with a greater percentage of share in that company in your portfolio.

Income needs: If you may need the money for living expenses then taking your dividends in the form of extra shares may be impractical.

Summary

Feature Benefit to you

Automation “Invest and forget” helps to build discipline

Fractional Shares You own more shares even if it is a fraction of a share.

Compound Interest You accelerate your savings through compounding.

Why companies offer a DRIP

DRIPS are one way companies can generate more cash. Companies have a good idea of how much money they are likely to generate with DRIPS so it is a cost-effective way of raising capital. Reinvesting future dividends into the company means that an investor has confidence in the company’s prospects.

About this article

The contents of this article is based on the writer’s own opinion and experience and may not be applicable to your personal circumstances, therefore discretion is advised. You may use this article as content for your blog/website, or ebook.

Read my other articles on www.robertastewart.com

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Fear of Loss will kill your chances of prosperity

Fear of Loss will hinder chances of prosperity

The fear of losing money will cause people to play it safe by not stepping outside their comfort-zone and not investing their money for greater returns. 

Leaving your money in an ordinary savings account will mean that inflation will erode the value of your money yet that is exactly what a lot of people do. They are afraid to take risks.

Some of this fear comes from those who had experienced the crash of 1987, better known as “Black Monday” when portfolios were hit hard. Some people lost their life-savings and more tragically, a lot of the money which went down the drain was borrowed money.

In these situations, shares were worth less than the money borrowed to purchase them.

There are risks which are worth taking and risks not worth taking. It takes discernment to tell the difference.

I remember once (about 2001) I bought shares in Air New Zealand and they almost went bust, well they would have if the government did not bail them out. The shares dropped to a low of fourteen cents a share. I bought my shares in the company at around $2 a share.

This was the last time I bought shares in an airline. It was an expensive lesson. 

I have known some people who never invest their money for fear of loss; they cannot handle the volatility of watching their balances go up and down yet they have no problem with buying their weekly lottery tickets. If they had deposited that same money into their kiwisaver then these people would have a fortune waiting for them once they reach the age of 65.

“You make your choices and your choices make you.”-Jim Addison, Scottish Pastor

It is all about choices.

The choices you make today will determine which choices you are able to make in the future.

If you have been sensible and joined a retirement scheme and contributed to it all of your life then this choice will give you more options in your later years.

Ask yourself these questions, “What action can I take today which my future self will thank me for?”

There will not be a single person who reaches the age of 65 or whatever the retirement age is in your country, who will regret ever joining  and contributing to a retirement fund.

It is everyone’s responsibility to get a financial education. This will help you to make right choices for your money. Apply what you have learned which are applicable to your personal circumstances.

Getting over your fear of loss will enable you to grow your wealth rather than just leaving it in the bank where inflation will steal the purchasing power of your money.

About this article

You may use this article as content for your blog, website, or ebook.

The contents of this article may not be applicable to your personal circumstances, therefore discretion is advised.

Read my other articles at www.robertastewart.com

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The Career Pyramid: Understanding Your Odds of Reaching the Top

What are your odds of success…

in your chosen field?

Written by R. A. Stewart

This all depends on what your definition of success is.

As kids all of us wanted to be somebody when we grew up. It did not necessarily mean being a rock star, it could have been as a policeman, a train-driver, a fireman, a farmer, a nurse, or a school teacher. I wanted to be a champion athlete and a horse racing trainer who trained champions.

Some dreams are achievable, there is a shortage of policemen and nurses in New Zealand. In other occupations there are more people wanting to break into those roles than the number of vacancies available to fill them.

It certainly pays to be multi-skilled as it will give you more options in life. It reminds me of a quote from my great aunt Ann Stewart, who was a nurse. She said, “Always have other strings to your bow.”

Other careers need lady luck on your side to enable you to reach the top.

Horse racing is one of these.

It is no secret that owners and trainers dream of winning the Melbourne Cup in Australia. The odds of achieving that feat are not on your side. 

The same can be said of becoming an Olympic athlete. Of all of the millions of people who play sport, a relatively few get to take home a gold medal.

Life mirrors that of a pyramid.

Here is an illustration of this:

In rugby only a tiny percentage ever get to play for the All Blacks. They are at the top of the pyramid. They get paid the most.

The next level down are the Super Rugby Players, the majority of whom do not get to be All Blacks. There are more players in this category. They get paid less than the All Blacks.

The next level down are the Provincial Players, who do not get paid apart from get some kind of reimbursement. They have jobs to go to outside of rugby. There are still more players in this category.

At the bottom of the pyramid are the club players who do it purely for the love of the game without any thoughts of advancing up the pyramid. For most people rugby is a sport to be enjoyed. The majority of rugby players are at the bottom of the pyramid.

All careers follow the same pyramid pattern where those at the elite level are at the top of the pyramid and the further down the pyramid you go the more people you will find.

Working in your chosen field

You may not have the talent or inclination to be an international sportsperson but you can be an asset in your chosen field and that does not mean that you have to be something out of the ordinary to become a valued member of society. A person who works at an entry level job can do so with such a good attitude that their diligence will not go unnoticed by their employers.

You may not particularly like your job and have any control over what happens at work but your attitude is something you can control. An employer with a bad attitude will take that bad attitude with them wherever they go. 

If you enjoyed this article then this ebook may interest you:

 

How to Enjoy Your Job

 

https://payhip.com/b/ygfk5 

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If you don’t have the money…

If you don’t have the money…

you don’t buy it!

Written by R. A. Stewart

Borrowing money to buy things is spending money you have not earned yet and there is a price to pay for that and it is called interest.

The worst type of borrowing is consumer debt. This is stuff you have bought with borrowed money. Consumer debt is purchasing things such as household appliances, motor vehicle, and the likes. Going on holiday with borrowed money is consumer debt. It is also irresponsible.  

As adults we must discipline ourselves to put off purchasing items which are pleasing to the eye but will leave us in debt if we break the budget in order to acquire whatever that may be. 

I can say that I have never owned a credit card in my life. Who needs one?

If someone cannot make ends meet on their income without a credit card then they need to take a stocktake because the interest payable on credit will compound over a period of time. All that interest which has to be paid on top of the borrowed money is money which could have been put to better use.

What seems to be at the heart of a lot of people’s financial problems is their lifestyle. I mean if you are going to get involved in a relationship then you had better make sure your income level is sufficient enough to pay for it all and the same applies to having kids and it is no good blaming politicians for this child poverty stuff if your own choices got you in a financial mess.

So you are in a spot of bother, now what?

There are three options.

1 Increase your income; easier said than done if you have other commitments but no one knows your personal circumstances better than you so there may be a way to work around this.

2 Decrease your spending; it is time to find ways to cutback by reducing your wants and minimising the amount you spend on your needs. 

3 Sell stuff that you no longer need. There are auction sites where you can sell your stuff. Make use of these.

There are some golden rules to follow when deciding whether to borrow for things like appliances and other items which may be consumer debt but are something which you need or will make your life considerably easier.

Ask yourself these questions:

1 Can you borrow the item? 

This all depends on how often you are going to use it. If you need a mountain bike to get to work  every day then you need to actually own one rather than borrow it but if it is a concrete mixer to do a one off job then borrowing is the way to go.

2 Can I purchase the item second hand?

You may not have the money to purchase something brand new but still can afford to buy it at a second hand store. This is a good option and you are still covered by the consumers guarantee act (In New Zealand)

3 Can I wait until I have saved the money for the item?

This option will definitely help you become a better money manager and also help develop the skill of prioritizing your spending.

4 Do I really need the item?

This all depends on your personal circumstances, tastes and preferences. It all boils down to whether you are prepared to sacrifice something now in order to save money.

Always keep in mind that saving something from your pay every week and keeping it in a rainy day account is a good habit to get into because it will enable you to pay cash for things which need fixing. It is also a good habit to invest some of your money for the long term such as in mutual funds. This is in addition to your government’s retirement scheme (Kiwisaver in New Zealand).

It is a bad habit to just spend everything in your pay packet every week so that by next week’s pay day you are broke.

www.robertastewart.com

Start investing on a shoestring

Sharesies makes it possible for anyone to get into buying and selling shares. It is an online share market platform where you have the option of purchasing shares in individual companies or in various funds (managed/mutual funds). You can even start with $5. This is a no brainer because it gives investors young and not so young the chance to improve their financial literacy. There is certainly no substitute for experience when it comes to learning and this is applicable to everything else, not just investing.

Join sharesies here: https://sharesies.nz/r/377DFM

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Note: This article is of the opinion of the writer and may not be applicable to your personal circumstances. I may receive a small commission if you sign up for sharesies.

#share market #borrowing money #needsandwants #savemoney #howtosavemoney #deadmoney

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What are you Saving For?

What are you Saving For?

Written by R. A. Stewart

The ASB television ad asks the question, “What are you saving for?”

When you know the answer to that question it becomes your goal. It leads to another question, “Where to invest your money until it is needed.”

In the TV ad, a boy was saving up to buy his favourite girl a gift. 

Developing the habit of saving for something specific from a young age is a good habit to get into. It teaches young people to be smart and strategic with their money.

As we get older, the things we are saving money for are in the hundreds, then thousands of dollars. As they say, “The difference between men and boys is the price of their toys.”

Choosing the appropriate kind of investment for your savings goal is important and the number one factor to consider is your timeline.

If you are saving for something long-term then just leaving your money in an ordinary savings account is not a smart way to save because inflation will erode the value of your money. 

Long-term is 5 years and more.

If you are saving for the medium term then you can be a little more conservative with your investing because you don’t want to invest in something volatile and find that there is a market meltdown just when you need that money.

Medium-term is between 1-5 years.

If you are saving for the short-term then you may need that money within the next twelve months then you can take a no-risk approach and just leave it in an ordinary savings account.

Short-term is up to 12 months.

Here are some long-term, medium-term, and short-term goals which you may be saving for.

Long-term

Retirement fund (Kiwisaver in New Zealand)

Education fund

Home deposit

Medium-term

Saving for a car

Overseas holiday

Marriage and kids

Short-term

Your emergency fund

Money set aside for rates, power, and other household utilities.

Once you have classified which category each fund belongs to it is then a matter of choosing the correct investment for each fund.

In managed funds there are three categories of investment, growth funds, balanced funds, and conservative funds.

Growth funds are suitable for long-term investments because they can be volatile but at the same time have the potential to grow your wealth. Young people have more time on their side to recover from market crashes, therefore, growth funds are appropriate for them, but that does not mean that retired people should not invest in growth funds as long as you are aware of the risks and that a market fall will not affect your lifestyle.

Balanced Funds are suitable for medium-term investing. They are not as volatile as growth funds but you are still exposed to the share-market which means your savings have the potential to grow but not at the same rate as growth funds.

Conservative Funds are less risky. You have a little exposure to the share market but not as much as with balanced and growth funds. Conservative Funds are more suited to short-term investing.

An ordinary savings account is appropriate for money set aside for rates and other house-hold expenses. Making the most of your discretionary spending money and using it for your savings goals can help you achieve them faster. A person who is poor with their money will fritter everything they have and then borrow for things they need.

It is important to avoid becoming fixated with your balances in whichever funds you have chosen. Balances will bounce up and down. That is the nature of the markets. 

There are plenty of opportunities to invest in this day and age with so many online investing platforms available in New Zealand. Sharesies, Hatch, and Kernel Wealth are three which I personally use. If you are from the US then Robinhood is a well-known one over there.

About this article

The views expressed may not be applicable to your personal circumstances, therefore discretion is advised.

You may use this article as content for your blog/website or ebook.

Read my other articles on www.robertastewart.com

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Breaking into your Retirement Savings Early can be costly

Breaking into your Retirement Savings Early can be costly

Written by R. A. Stewart

New Zealand’s retirement scheme is called Kiwisaver. There is one thing which makes this scheme unique to retirement schemes of other countries and it is this:

There are circumstances when people can access their money prior to reaching their retirement age, 65 in New Zealand. People can access their money early for any of the following reasons:

  1. Terminal illness
  2. Going overseas permanently
  3. Purchasing their first home.
  4. Hardship.

Numbers 1 and 2 are quite understandable. Number 3 is that if you are purchasing your first home you may be able to use part of your kiwisaver for a house deposit.

Reason number 4 is the most common reason for premature kiwisaver withdrawals. In 2025 58,000 people withdrew money from their kiwisaver for hardship reasons. 

Breaking into your Kiwisaver early is not easy. You have to prove undue hardship, something which 58,000 people have managed to do. 

It is the fund manager’s supervisor who makes the decision to release your funds. They still have to follow a set of strict guidelines and a lot of people will have their application to withdraw early declined as a result.

Some people will see their Kiwisaver balance and think, “You can’t take it all with you, I can do a lot with that money,”

Kiwisaver is earmarked for your retirement or for your first home purchase and should not be touched otherwise you will be paying for it later on down the track.

The whole point of kiwisaver and any other retirement scheme is that you are saving money for your retirement and do not withdraw and keep contributing. 

Consistent long-term savings work well thanks to the magic of compound interest. 

Any break in savings will interfere with this process. 

With compound interest you earn interest on the interest and this helps your savings to grow faster. 

At retirement there can be a big pot of money waiting for you thanks to compound interest which is a friend of the long-term saver.

Making right choices

It is important to make the right choices when making important financial decisions, whether that is entering into a new relationship, purchasing a car, taking out a loan, or making major home improvements. The pros and cons need to be explored thoroughly and not to be rushed into.

All of these major decisions will have consequences, which will eventually lead to an outcome. 

One big mistake is to make major decisions based on today’s circumstances as if today’s circumstances will remain the same forever. Investing some if not all of your discretionary spending money in a share market fund other than kiwisaver will improve your financial know-how. There are several online share-market investing platforms available to begin your investing portfolio if you have not already started one. It is just a matter of being consistent with your investing and letting compounding interest do its work. 

About this article

The contents of this article is of the experience and opinion of the writer and may not be applicable to your personal circumstances, therefore, discretion is advised. You may use this article as content for your blog/website or ebook.

Read my other articles on www.robertastewart.com

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Staying calm during volatile market movements

Staying calm during volatile market movements

The markets do not react to war or other economic events very well and it does not matter that New Zealand or other countries which have nothing to do with the war are far away from the centre of the event. Whether it be the conflict between the USA and Iran, inflation, or economic events in the US.

Investors have their own thoughts on the markets with many saying “Now is not the time to invest.” 

Those with little experience at investing may find the market volatility a bit on the scary side, but the markets have been through this previously and each time came out of the dark tunnel out of the other side.

There have been about 20 wars in the past century which have affected the markets, most notably was World War 11. Most of these markets recovered within 12 months of the war ending. 

It may be so that the markets are down as a result of this war but really it is more due to the blockage of the channel which has caused the oil and gas supply shortage which is the main culprit of this market downturn.

This is likely to hit Trump hard in the pocket if it continues and the President will be as concerned about his portfolio as no doubt other investors are. He is looking for a way to end this conflict. This may be outside of your control, but your portfolio and how you respond to current affairs is something you can control.

Whatever is happening in the world and however the markets are responding is not a reason to react and allow emotion to rule your investment strategy. If you have planned your financial strategy then  you should have taken into consideration the volatility which occurs in the markets. 

If you are too cautious you will miss opportunities which are available.

Those who are contributing to their retirement fund should continue to drip feed money into the markets.

Those who have a lot of their wealth tied up in shares should sit tight because it is not a time to sell. On the contrary, those who are in a position to do so can take advantage of the lull in the share market by purchasing shares at a lower price.

If you have a lump sum to invest then an idea is to just invest a portion of it in the markets every week in order to take advantage of the lows in the markets. This is called dollar-cost averaging.

I use this strategy when investing in sharesies. I choose one New Zealand company to invest in per year and drip-feed money into this company throughout the year. This year it is Meridian Energy.

This is a strategy I have used for buying Bitcoin. That way I have bought some cryptocurrency when the price is both up and down.

Those who are fully invested should hang in there because it is not the time to sell. Your investment decisions should be made with your time frame in mind. That is whether the fund is for the long-term, medium-term, or short-term. If you need the money in the short-term then you should not be investing in something volatile, otherwise you may find that your fund has fallen in value when it comes to using that money.

About this article

The information in this article is of the experience of the writer and may not be applicable to your personal circumstances, therefore discretion is advised. You may use this article as content for your blog/website or ebook. 

Read my other articles on www.robertastewart.com

Saving money on fuel isn’t about one major change; it’s about the “aggregation of marginal gains.” By combining better maintenance with smoother driving and smarter shopping, the average driver can save hundreds of dollars a year.

Get this Guide on How to Save on Fuel

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7 Signs that you are stuck in a rut

Written by R. A. Stewart

Do you feel as though you are just going through the motions as far is everyday life is concerned? Do you have nagging thoughts in the back of your mind that you should do things differently to spice things up?

This kind of thinking is the “fresh start effect”, and this takes place at significant dates in our calendar. The New Year, Birthdays, and Anniversaries being the most popular days for the fresh start effect to to present.

Wanting things to be better for ourselves is a part of growing as a human being, as long as this is not an endless dissatisfaction with your life irrespective of your personal circumstances. If this is the case then you will end up hopping from one job to another, one relationship to another, and so forth.

At the other extreme, staying in your comfort zone can become like a prison where you have given yourself a life-sentence.

If on the other hand, you feel the itch to do something different, then these indicators may point in your direction that change is needed.

Here are some questions to check in with.

  1. Are you bored with your routines?
  2. Do you set the same goals every year?
  3. Are you excited about what the year brings or are you hoping that is passes without much disruption to your routine?
  4. Are you or have you learned anything new or met new people this year?
  5. Is there anything you do which requires courage?
  6. What has been the highlight of your year so far?
  7. Would you be happy if nothing at all changed this year?

Working in the same job for say five years is called five years of experience, but is it just one year’s experience repeated five times? If your entire life looks exactly the same as it did ten years ago are you comfortable with that?

This is not to say that you should change jobs just for the sake of it because the bills have to be paid. It is possible to stay in the same job for decades but be fulfilled in all other areas of your life and be satisfied with that. Having a fulfilled life outside of work makes going to work easier. It is something to talk about with your work colleagues.

Always remember, it’s your life, you don’t need anyone’s permission to question whether you are in the right job or career. You are allowed to be all that you are destined to be- or at least try to be, even if you don’t succeed. If you don’t step out of your comfort zone you will never know what might have been.

How to Love Your Job Even if You Don’t

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Drive Further for Less: A Practical Guide to Fuel Economy

 

With fuel prices often feeling like a moving target, finding ways to stretch a tank of gas is a priority for most drivers. While you can’t control the price at the pump, you can significantly influence how much you spend by adjusting your driving habits, maintaining your vehicle, and using a little bit of tech.

Here is a comprehensive guide to maximizing your fuel efficiency and keeping more money in your pocket.

1. Smooth Out Your Driving Habits

The way you handle your vehicle is the single most impactful factor in fuel consumption. Aggressive driving—speeding, rapid acceleration, and hard braking—can lower your gas mileage by up to 30% on the highway.

  • Anticipate the Road: Instead of rushing toward a red light only to slam on the brakes, take your foot off the accelerator early and coast.
  • The “Egg” Technique: Imagine there is an egg between your foot and the gas pedal. Accelerate gently to avoid “flooding” the engine with fuel.
  • Use Cruise Control: On flat highways, cruise control helps maintain a steady speed, which is much more efficient than constant manual micro-adjustments.

2. Maintenance is Key

A poorly maintained car works harder and burns more fuel. Regular check-ups are an investment that pays off at the pump.

  • Check Tire Pressure: Under-inflated tires have higher rolling resistance. Keeping them at the manufacturer’s recommended PSI can improve mileage by up to 3%.
  • Replace Air Filters: A clogged air filter restricts airflow to the engine, hurting performance.
  • Use the Right Oil: Always use the motor oil grade recommended by your manufacturer. Using the wrong weight can drop your efficiency by 1–2%.
  • Get this Guide on How to Save on Fuel

3. Lighten the Load and Streamline

Your car’s aerodynamics and weight play a massive role, especially at higher speeds.

  • Clean Out the Trunk: Every extra 50kg (approx. 110lbs) of weight can increase fuel consumption by about 1-2%. Remove heavy items you don’t need for your daily commute.
  • Remove Roof Racks: Empty roof boxes or bike racks create immense wind resistance. If you aren’t using them, take them off to “slick” your car’s profile.

4. Master the Pump Strategy

Where and when you buy fuel can be just as important as how you use it.

Strategy Benefit
Fuel Apps Use apps like GasBuddy or local equivalents to find the cheapest station on your route.
Loyalty Programs Many supermarket chains and fuel brands offer “cents-off” per liter or gallon when you shop with them.
Avoid the Freeway Pump Stations located directly off major motorways often charge a premium for convenience. Drive a few minutes into town for better rates.

5. Re-evaluate Your Commute

Sometimes the best way to save on fuel is not to use it at all.

  • Trip Chain: Combine your errands into one round trip. A cold engine uses significantly more fuel for the first few miles; once the engine is warm, it operates at peak efficiency.
  • Park and Walk: If you have multiple stops in a shopping district, park in a central spot and walk between shops rather than driving from one storefront to another.

Final Thoughts

Saving money on fuel isn’t about one major change; it’s about the “aggregation of marginal gains.” By combining better maintenance with smoother driving and smarter shopping, the average driver can save hundreds of dollars a year.

Get this Guide on How to Save on Fuel

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Share market slumps

Notable share market falls

Written by R. A. Stewart

The share market has weathered several major storms in the past. While the pandemic was indeed a “Flash Crash” other downturns such as the “Dot-com Bubble” and the “Global Financial Crisis” (GFC) took much  longer for investors to recoup their money. Here are some well-known share-market tumbles since 2000.

Year Crash % fall Recovery Time (to previous peak)

2000: The Dot-Com burst -49% 7 Years

2007: The Global Financial Crisis -56% 5.5 years

2020: The Covid Pandemic -34% 5 months

2022: The 2022 Slump -25% 2 years

The Dot-com slump hit the tech sectors hard. The Nasdaq which is tech-heavy actually took 15 years to recover. The severity of the losses are dependent on which sectors investors had their money in. It is a stark reminder of the value of diversification.

The Global Financial Crisis was referred to as “The Great Recession.” It took steady gains for five years for the market to finally surpass its 2007 level.

The 2020 pandemic was described as the fastest bear market in history. It dropped 34% in just over a month then recovered quickly due to government stimulus and the rapid shift to a digital economy.

The 2022 slump was due to high inflation and high interest rates. This was a “grinding” beat market rather than a sudden crash. It took until early 2024 for the market to reach new all-time highs, largely fueled by the boom in artificial intelligence.

Managing your assets

During these times when the markets are falling, investors find themselves in the “Asset rich, cash poor” trap. They do not want to sell their shares on a falling market in order to cover basic living expenses. This happens when you have all of your wealth tied up in a share portfolio or a retirement fund and little money elsewhere.

It highlights the importance of diversification.

Strategies to weather the next share market tumble:

  1. Keep a buffer fund for emergencies. This is for unexpected expenses which crop up from time to time. It ensures that you are never in a situation where you need to sell shares when they are at the bottom.
  2. Diversify for assets. Not all of your assets will fall at the same time. Some of them such as bonds may hold steady during a share market slide.
  3. Check your investment settings

Changing from growth to balanced, or balanced to conservative funds during a share market tumble will lock in losses and make them permanent, but when you are making new investments, choose where to invest according to your timeline and the purpose for the money.

If you are looking to purchase a car within the next three years, then growth funds are not recommended. Balanced or conservative funds is a better option, but if you want to be safe then a separate personal bank account will do the job.

Share market ups and downs will occur from time to time and every decade has its events which triggered a fall in stock prices, but if you have organised your finances smartly you can weather any storm which any world event throws at you.

About this article

The content of this article is of the opinion of the writer and may not be applicable to your personal circumstances, therefore, discretion is advised.

You may use this article as content for your website/blog, or ebook. Read my other articles on www.robertastewart.com