What's Dollar-Cost-Averaging?

By moneyredpill | MoneyRedPill | 4 Mar 2020

Dollar cost averaging - Also known as “DCA,” is a simple and oftentimes passive investing strategy in which a fixed amount of money is invested at recurring intervals over a long period of time, regardless of share price. This is a passive strategy that, by investing regardless of share price, does not attempt to ‘time’ the market. To that point, an investor will probably inadvertently purchase more shares when prices are low, which will reduce the individual’s overall average cost of investment. DCA into Index Funds has been as advocated by Warren Buffett, among others, as the most effective strategy for the average investor, famously citing “Time in the market is better than timing the market.”

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