Stop Waiting for the 'Right Time' to Invest. There Isn't One
Bottom line
Investors who wait for the perfect entry point earn less than those who just keep buying every month.
In this guide
What it is
Dollar cost averaging means investing a fixed dollar amount on a regular schedule, no matter what the market is doing that day.
By the numbers
You invest $200 every month into an index fund (a single investment that tracks hundreds of stocks at once). When prices drop, your $200 buys more shares. When prices rise, it buys fewer. Over 10 years at an average 7% annual return, that $200 a month grows to roughly $34,000. on just $24,000 of your own money.
How it works
You set a fixed amount and a fixed date, then it goes in automatically. A low price means you buy more shares that month. A high price means fewer. Your average cost per share ends up lower than if you had dumped everything in at one random moment.
The catch
Dollar cost averaging does not protect you from loss. it just reduces the damage from bad timing. If you invest $200 a month for a year and the market drops 30% in month two and stays there, you still have less money than you put in. The strategy works over years, not months.
What to check next
Set up an automatic transfer of any fixed amount. even $50. into an index fund on the same day you get paid each month.
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