We\u2019ve all been there.<\/p>\n
Our phone in our hand, our online banking app opened up, ready to pull the trigger on a huge purchase.\u00a0<\/span><\/p>\n It\u2019s exciting because this could really pay off.<\/span><\/p>\n It\u2019s stressful because every investment comes with at least some element of risk.\u00a0<\/span><\/p>\n We\u2019ve all struck at the right time and watched that one-time purchase gain steam and make us a tidy profit. We\u2019ve also been on the other side of the equation, where our research doesn\u2019t pay off and the fund goes the other way.\u00a0<\/span><\/p>\n That hurts, but it\u2019s the nature of the beast.\u00a0<\/span><\/p>\n Well, what if you could switch to a strategy that took advantage of time and natural growth?<\/span><\/p>\n Dollar cost averaging is an investment strategy where an investor buys <\/span>a fixed dollar amount of an investment on a regular schedule, regardless of the movement of the share\u2019s price.<\/span><\/p>\n As the price declines, you <\/span>buy a fixed amount which gives you more shares<\/span>. As it goes up, <\/span>you buy a fixed amount which gives you fewer shares.\u00a0<\/span><\/p>\n And at the end you have your targeted investment in the shares, at a price that will not be the highest price payable for the shares. Nor will it be the lowest price available. It will be an<\/span> average cost of the share<\/span> for the period you used the strategy<\/span>.\u00a0<\/span><\/p>\n This strategy is especially useful in times of economic turmoil. People who have invested in the oil and gas industry in the past half decade can certainly relate with this simple fact of life in that sector.<\/span>\u00a0<\/span><\/p>\n Well, with markets such as these, buying at multiple times lets you avoid the risk of paying the highest possible price if you were to buy, say, once a year<\/span> at the top of a market.<\/span>\u00a0<\/span><\/p>\n Let\u2019s say you\u2019ve done your research on a product that\u2019s been steadily growing for the past year or so. It\u2019s a fund you believe in and you want to support.\u00a0<\/span><\/p>\n Well, if this product is going to grow over the long run, buying into it multiple times lets you pay smaller, easier-to-manage amount<\/span>s<\/span> throughout the year. This way you don\u2019t have to save up a lump sum to invest. You can set up automatic payments to steadily grow your investment portfolio over time. This strategy lets you devote a specific amount each month so you can use the rest of your savings on other things that aren\u2019t related to investments.\u00a0<\/span>\u00a0<\/span><\/p>\n A single grain of sand isn\u2019t much when you start building a pyramid, but if you\u2019re multiplying that grain every day, the results are going to add up quickly.\u00a0<\/span><\/p>\n Dollar cost averaging allows your investment dollars to start working for you much more quickly because you\u2019re not waiting for a one-time annual deposit. Buying multiple times means you start earning interest and dividends right away. Plus, when you buy into something more often, even it\u2019s at a small amount, you\u2019re going to start to see growth quicker.\u00a0<\/span><\/p>\n I<\/span>t\u2019s sort of ironic, sure \u2013 when you spread your money out over the longterm you\u2019ll actually start seeing results much more quickly. Even if those results start out on the small end of the spectrum, we all like watching our investments grow at a steady pace, right?<\/span><\/p>\n Right!<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"We\u2019ve all been there. Our phone in our hand, our online banking app opened up, ready to pull the trigger on a huge purchase.\u00a0 It\u2019s exciting because this could really pay off. It\u2019s stressful because every investment comes with at least some element of risk.\u00a0 We\u2019ve all struck at the right time and watched that… What is Dollar Cost Averaging?<\/b><\/span><\/h3>\n
Advantage 1: Doing Battle with a Volatile Market<\/b><\/span><\/h3>\n
Advantage 2: Easy Budgeting<\/b><\/span><\/h3>\n
Advantage 3: Early Returns<\/b><\/span><\/h3>\n