dollar cost averaging 101
What is Dollar Cost Average?
• Dollar Cost Average or DCA, is a simple investment strategy where you invest equal sums of money for example 200 at regular intervals regardless of the how the market is performing.
• This is similar to what you already may be doing with your pension/retirement plan.
• It is said by many experts as almost certain to get results that are as good or better than aiming to buy low and sell high.
• So If you have 12 000 to invest, you can break this down into small investments of 1 000 every month or 500 fortnightly.
• Instead of stressing and worrying about when to enter the market, you can (DCA) your investment over time.
What are The Benefits of DCA?
No need to wait for the best time to invest to beat the market stock predictions (timing the market)
Takes out the fear and emotion tied to investing due to market volatility, as you invest a set amount regularly.
Reduces risk as you spread out your stock purchases so you are not buying shares only when they are at the high price but a mix of high and low.
Focuses on long term investing since markets go up over time
You can JUST SET IT AND FORGET IT!!!
