How to Use Dollar Cost Averaging to Your Advantage as a First-Time Investor

You see it mentioned in every article about investing: “Dollar-cost averaging.” But what does that mean, and do you need to worry about it? The short answer is yes it is a valuable lifelong skill.

What Is Dollar-Cost Averaging?

Dollar-cost averaging is a form of systematic investment. It works by making monthly investments, regardless of price, with the goal of lowering your average cost per share. This strategy is often used by investors interested in investing but unsure when to enter the market.

It’s that simple.

How to Implement DCA

One of the easiest ways to start implementing DCA is to set up an automatic monthly investment plan to purchase shares of stocks or cryptocurrency on a specific date. If this option isn’t available you can simply move a portion of your paycheck into your investment account and then buy the investment you plan on dollar-cost averaging once a month or twice a month depending on how often you would like. To effectively DCA use money that you don’t need so your investment can grow and really pay off long-term.

Ending Notes

You can navigate buying and selling investments over the long-term with ease you just need to know how. Dollar-Cost Averaging makes buying easy and consistent. You could set aside a portion of your biweekly or weekly pay knowing it is going towards a brighter future.

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