Dollar Cost Averaging (revisited)

DID YOU KNOW...
You have the potential to see higher returns by investing small amounts over the long-term instead of investing one lump sum ?

What is Dollar Cost Averaging?

Dollar Cost Averaging (DCA) is a systematic investment plan where investors purchase securities at set intervals and fixed dollar amounts over a long period of time.

By investing your assets in smaller amounts over an extended length of time, instead of in a lump sum, you purchase more shares when a fund's price is low and fewer shares when the price is high. Therefore, the average cost per share is less than the average price per share, which in turn, can build your portfolio and help you achieve long-term wealth.

3 reasons why you should consider Dollar Cost Averaging . . .

1. Smooth out the impact of market volatility. Buying on a monthly basis helps take the emotion out of investing regardless of market fluctuation. Your assets are in a disciplined accumulation phase.

2. You can participate even with small investments. You decide the dollar amount and frequency with your financial representative. This is a great investment approach if you are new to investing or simply want to make smaller investments. Investing a small amount each month or every other month can ease you into the market and can make a difference when saving for the long-term.

3. Simple to Set-up — make it automatic. Consider the convenience of setting up an automatic withdrawal plan with your financial representative.

I suggest that you look to rebalance your portfolio every 6 months according to an asset allocation model for growth and income and then read The Best Large Fund Descriptions.

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