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Dollar Cost Averaging - Defined and Put to Use

If you have money to invest right now you’re going to want to make sure to use the Dollar Cost Averaging technique (DCA).

Dollar Cost Averaging – Breaking your total investment amount into smaller amounts and investing those smaller amounts over time.

If the market goes up over the time frame you are investing these smaller amounts, you won’t make as much as if you invested the whole amount from the beginning. But if the market drops you’ll end up with a much better price! This is a great technique to help you sleep at night knowing that you’re somewhat protected.

With the stock market somewhat risky right now, we strongly recommend using this technique.

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Comments (2)

Allan:

DCA is a great technique that I use all the time. It's not just great when the market is shaky but it's a great way to invest all the time. Always look for the dips as a great time to buy in. Last Friday was a perfect example!


Anonymous:

DCA is good when you are constantly taking money out of your paycheck and investing each month. But if you have cash in hand to invest, just through it all in. You might miss out on a big up day by not investing it all at once.


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