Apr 12 in General discussion
What is Dollar Cost Averaging?
(DCA) is a strategy for investing money over time. Imagine you have $1,000 to invest. Instead of putting all $1,000 into the market at once, you decide to spread out your investments over several months or years.
Here's how it works:
Let's say you invest $100 every month for ten months. Sometimes, when you buy, the market may be high, and sometimes it may be low.
When the market is high, your $100 will buy fewer shares of a stock or fund. But when the market is low, your $100 will buy more shares because prices are lower.
Over time, by consistently investing a fixed amount, you end up buying more shares when prices are low and fewer shares when prices are high. This can help smooth out the ups and downs of the market and reduce the impact of market volatility on your investments.
Dollar-cost averaging is often recommended for long-term investing because it helps reduce the risk of investing all your money at once when prices might be high. Instead, it allows you to gradually build your investment portfolio over time.
0
0 comments
What is Dollar Cost Averaging?
skool.com/w-group-8881
Welcome!
Let us help you take your finances to the next level by teaching and sharing the BEST modern money habits.
"A Rising Tide Lifts all Ships"
powered by