Sunday, 22 January 2012

Dollar Cost Averaging

Dollar Cost Averaging (“DCA”) often is popular during rising markets.

If DCA is adhered to over many years, then this formula should work.

The difficulty is that few people are so situated that they can invest the same amount each year.

Economic downturns often constrain one’s ability to invest just when stocks are trading at their lowest valuations.

Furthermore, when prosperity for the average investor returns, so too do high valuations.

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