What is Dollar Cost Averaging?

Dollar Cost Averaging is an investment strategy where you invest a fixed amount at regular intervals regardless of the desired asset’s price. The goal is to potentially reduce the impact of volatility on the overall acquisition by spreading out the investments over a period of time.

Why Bother Do This?

Imagine you wish to invest $12,000 in a stock. Instead of investing it all at once, you invest $1,000 every month for 12 months. This could be helpful from a budgeting standpoint, but more importantly you are taking a position at an average price, thereby mitigating the risk of unsuccessful market timing.

-Zac