how do you make money of low dividend stock/funds/etf if they fluctuate over time....most funds/etf go up,down

Question

Most funds/etf (especially high risk) go up and down ....i know vipers (from vanguard) recommend to hold them for long term (5 years) even though they are low dividend....then i cannot see what difference does it make if you pull your money out after a year or after 5 years...coz lets say almost no dividend and you had 100 shares bought for 50$ each and worth 70 $ after the 1st year and also 70$ after the 5th year...you were better off removing it after th 1st year...

i meant do not fluctuate over time

Answer 1

Well, you are right, if over time they don't go up or down, and there is little to no dividend pay out, you don't make a profit or suffer a loss.

Remember, investing does not come with any guarantees and any investment can go up or down or stay level.

However, and this is where the words "over time" become important, the stock market has always risen. Yes, over shorter time periods you can watch it go down, or zig zag (and btw..dollar cost averaging in a zig zag market can make a good profit), but over longer periods of time is rises.

Take a good look at a DOW or S&P chart and you can see this for yourself (I know info is out there that actually details this but I can't offer up a link without investing a ton of time).

And as to whether or not you should have pulled it in year 1 instead of waiting 4 more years? Well that's a big DUH! Because if we could PREDICT the future, investing would be perfectly safe for everyone wouldn't it?

You can't predict the future so you are in effect placing a bet. You bet your investment grew more than it would have if you'd just bought a CD instead, on the day you intend to cash it out. Depending on the investment, the date in and the date out, your answer will vary.

If you do figure out how to know in advance that your stock will be worth exactly the same on future dates, let me know. I think I could get rich with that one.

Answer 2

You need a systematic approach.
There are several ideas to profit from a fluctuating fund or market.

One method is dollar cost averaging: each month you invest a fix amount of money. In months when the fund is low this will buy you more parts than in months when the fund is relatively high. So the average cost per part will be lower than the average of the funds price.

Second method: rebalancing. Start by investing half of your money, and keep the other half in cash. Every month or three months you rebalance. If the market has gone up (down), the dollar value of your market fund parts will be more (less) than 50% of your total capital. Now sell (buy) as much of the fund that would put you again 50-50 in the fund and in cash. Of course the percentage could be different than 50-50.

Answer 3

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Answer 4

BUY ALOT FO THOSE. SINCE MOST LOW DIVIDEND ONES ARE CHEAP, MAKE SURE THAT IT IS A SAFE INVESTMEMT AND JUST SIT DOWN AND REALX BUT ALWAYS CHECK THOUGH