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Dollar Cost Averaging
Introduction to dollar cost averaging
Dollar-cost averaging is the term given to the ability to drip-feed your savings into an investment, taking advantage of changing investment prices.
Many investors tend to stay out of certain investment markets, such as the stock market, because of the market's volatility (the up and down movements of the market).
Dollar-cost averaging not only allows you to ignore the volatility of investment markets, it also allows you take advantage of it.
To make use of dollar-cost averaging, you must be in the market long-term.