All topics · Step 4: Invest every month

Crashes and fear.

Markets fall sometimes, often a lot. Here's how to stay calm, and why your cushion matters.

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Growth calculator

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Real returns go up and down. This is an average, not a promise.
Could grow to

You put in
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Times your money

Monthly compounding, money added at the end of each month. Before fees, taxes and inflation.

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Remember

Three things to know.

Expect drops

Falls of 20% or more have happened many times. They're part of investing, not a sign it's broken.

Never invest your cushion

Money you might need soon belongs in savings, so you never have to sell low.

Keep buying

Investing the same amount every month means you buy more when prices are low.

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Questions

Good questions.

Should I sell when the market drops?
Selling locks in the loss. People who kept investing through past crashes usually came out ahead, though the future isn't guaranteed.
How long do recoveries take?
It varies: months for some drops, years for others. That's why money for the next few years shouldn't be in stocks.
What if I can't sleep at night?
Your mix may be too risky for you. Holding some bonds or cash can make the ride calmer.
Is now a bad time to start?
Nobody knows. Investing a fixed amount each month removes the need to guess.