Financial markets can be complex. Investors face an influx of news and fluctuating prices everyday, making it difficult to sift through information and stay unemotional to make sound investment decisions. If you’re just starting out with investing and are unsure about how the market is likely to move, the investment method known as dollar cost averaging (DCA) can help you begin your investment journey and build wealth over time.
What Is Dollar Cost Averaging?
Dollar cost averaging is an investment strategy that helps you cushion the impact of market fluctuations through regular investments, regardless of market conditions.
By consistently investing a fixed sum of money over a period of time, you end up buying more shares when prices are low and fewer shares when prices are high. Over the long term, the cost of all your investments purchased are averaged out. The benefits of both averaged returns and...