When you dollar cost average, you invest
a specific amount at regular intervals.
The
Informed
Investor's Guide
Dollar Cost Averaging Defined
If you can count on nothing else, count on this: the market will go up and
it will go down. What you can't predict is when. For many people, that uncertainty
can make investing difficult.
Whether it's a bull or bear market, it's hard not to react to marketplace
swings, especially if you're concerned about your future financial security.
Many investors, even highly sophisticated ones, are prone to making decisions
based on short-term market changes. And that can have a disastrous effect
on their potential long-term returns.
Fortunately, there's a way to keep your cool in the face of market fluctuations
and help them work to your advantage. It's called dollar cost averaging
(DCA).
