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If youre ready to get started,learn about Ormans investing blueprint.
It likes to go up more than it likes to go down.
Even when they go lower, they return, and they go higher, she said.
Thats true in the long and short term.
But despite these dips, the market remains in better shape overall.
She would bet on those declines in one of two ways: shorting themarket or buying puts.
For Orman, these strategies feel counterintuitive to what she sees as anationally shared financial optimism.
For her, the historic increase in U.S. stock prices reflects a desire for things to improve and grow.
I Felt So Horrific
Orman said she didnt have a positive experience buying puts and short-selling stocks.
She simply didnt like betting on something declining.
Every time I did that, I felt so horrific wanting the market to go down, she admitted.
She couldnt stand the desire to decline, and she hasnt used those strategies again.
Pessimists are less able to see losses as temporary and often sell at the first sign of trouble.
Financial services expert Nick Murray agrees with the value of economic optimism.
In the classic industry text Simple Wealth, Inevitable Wealth, Murray encouraged investors to hope for the future.
No one can plan for the future much less invest successfully in it without believing in that future.
Of course, if you invest long term,temporary market dipsare inevitable.
Its in the nature of markets to go up and down.
Orman believes in riding these out with a steady investment strategy called dollar-cost averaging.
This involves investing aset monthly amount, regardless of share prices.
You buy fewer shares when prices are high and more when prices are low.
Say you invest $100 every month.
Your chosen stock costs $5 per share in January, so you buy 20.
A market dip means the same stock costs $4 in February, and you buy 25.
Youll benefit more from your February investments when the market recovers because you purchased more shares.
You kept investing even through temporary declines, and your portfolio is richer.
Of course, theres never a guarantee when it comes to investing.
Risk always exists, whether you invest optimistically or pessimistically.
But history sends a clear message: Good things come to those who wait.
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