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Dollar Cost Averaging x Fractional Investing
By New Academy of Finance  •  September 22, 2022

How to engage both Dollar Cost Averaging and Fractional Investing the easy way

Imagine you are gifted $18,000 to invest in 2007. You are given 2 strategies. The first strategy is to Lump Sum invest your $18,000 into the S&P 500 ETF (ticker: SPY) and the second strategy is to engage a Dollar Cost Average approach by investing $100 at the start of each month into the same ETF, over the next 15 years. Which of these 2 strategies would you select to generate the largest portfolio value? For readers who are familiar with these 2 strategies, and with the benefit of hindsight, one would have selected the Lump Sum approach to generate the greatest returns. This is what your portfolio would look like at the end of 2021. $18,000 invested in the SPY ETF would have a value of $81,257 at the end of 2021. This is how...
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By New Academy of Finance
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