Points to know
- Setting up automatic investments helps you to not miss an investing opportunity.
- Making regular investments can help you stay on track and reach your goal faster.
Investing strategies
Why automatic investing could help you save more
Whatever your goal is for the money you invest, you have a greater chance of reaching it by contributing to your portfolio regularly.
Investing strategies
Managing portfolios
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Investor goals
What's automatic investing?
Automatic investing is a way to streamline your finances and remove the challenge of deciding when to invest. It's an easy way to make consistent contributions to your accounts by automating recurring bank transfers into taxable or retirement accounts.
Want to max out your IRA contributions for the current year? Automatic investing makes it easier.
Get some time back
Making regular investments can help you meet a big goal without affecting your daily life.
Are you struggling to keep up with your calendar? Do you want one less thing to remember?
Automated investing can be a good option if you want to eliminate the stress of deciding when or how often to invest. Instead, with automatic investing, you'll have the peace of mind knowing that your investments are scheduled and timely.
Take back the time you would've spent deciding when and how to invest. Instead, watch that movie you've really wanted to see. Or go to dinner with your family. Have a good night’s sleep while knowing your investments are working for you.
Practicing smart investment behavior
Not only is setting up automatic investments a way to simplify your life, but it's also smart investment behavior. It removes the pressure of deciding when to make each investment—sidestepping the possibility you'll be too indecisive to make any move at all.
Once you decide to regularly invest smaller sums of money, it's important to commit to a firm plan. If you say you'll invest whatever you have left at the end of each month, you'll probably find that "whatever is left" often translates to "nothing."
Dollar-cost averaging
Setting up automatic investments is also a simple way to get into dollar-cost averaging—which is a fancy way of saying the shares you own will have had various purchase prices because you bought them at different times.
Why is this a good thing? When shares are more expensive, you'll buy fewer of them. When they're cheaper, you'll buy more of them. Overall, this may push down the average cost of your shares.
Making multiple purchases at different share prices could also be beneficial at tax time if you can sell specific shares for a loss to offset other sales where you had taxable gains.
See how Digital Advisor can get you started with automated investments
All investing is subject to risk, including the possible loss of the money you invest.
Vanguard's advice services are provided by Vanguard Advisers, Inc. ("VAI"), a registered investment advisor, or by Vanguard National Trust Company ("VNTC"), a federally chartered, limited-purpose trust company.
The services provided to clients will vary based upon the service selected, including management, fees, eligibility, and access to an advisor. Find VAI's Form CRS and each program's advisory brochure here for an overview.
VAI and VNTC are subsidiaries of The Vanguard Group, Inc., and affiliates of Vanguard Marketing Corporation. Neither VAI, VNTC, nor its affiliates guarantee profits or protection from losses.
Dollar-cost averaging does not guarantee that your investments will make a profit nor does it protect you against losses when stock or bond prices are falling. You should consider whether you would be willing to continue investing during a long downturn in the market, because dollar-cost averaging involves making continuous investments regardless of fluctuating price levels.
We recommend that you consult a tax or financial advisor about your individual situation.