Investing 101: Dollar-cost averaging (DCA)

Dollar-cost averaging (DCA) is a long-term investment strategy that involves investing a fixed amount of money in a particular asset or fund on a regular basis, regardless of the price. This means that you buy more units when the price is lower and fewer units when the price is higher. Over time, this helps to smooth out the volatility of the market and reduce your average cost per unit.

There is no guarantee that the stock market will continue to perform as well in the future as it has in the past. However, DCA is a proven way to reduce risk and build wealth over time. If you are investing for the long term, DCA is a strategy that you should consider.

Lets discuss some of the benefits of using DCA over a long period of time:

• It can help you to smooth out the volatility of the market and reduce your average cost per unit.

• It can help you to stay disciplined and invest regularly, even when the market is down.

• It can help you to avoid the temptation of market timing.

• It is a simple and easy-to-understand strategy.

If you are new to investing, DCA is a good way to get started. It is a relatively low-risk strategy that can help you to build wealth over time. Things to keep in mind, be patient, Invest in a diversified portfolio and choose a long-term investment horizon. Until the next episode, cheers.