Is dollar-cost averaging a good investment strategy?
Asked 4 years ago
What are the benefits of dollar-cost averaging?
Andrew Moran
Sunday, October 17, 2021
If you are a long-term investor, dollar-cost averaging (DCA) is the best investment strategy you can employ.
Here are just some of the benefits of DCA:
- Avoid the volatility of the stock market and take advantage of the highs and lows.
- You do not need to time the market.
- The emotion and stress are gone because you have a predetermined time and amount to invest.
- Vast lump sums are unnecessary when buying stocks.
The only possible setback is that, because the stock market rises over time, investing smaller amounts over a period could risk losing additional capital gains.
Aside from that, pick a couple of stocks you want to hold forever and DCA moving forward.
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