Finance

Connecting the dots on Dollar Cost Averaging

Dollar-cost averaging (DCA) is a popular investing technique whereby you incrementally purchase more shares of the funds in your portfolio: in small amounts on a monthly or quarterly basis. The main idea is to not invest all of your money at once: avoiding big dips in the market right after your purchase. If you only invest a little at a time, you’ll buy more shares when the market is down and fewer shares when the market is up. Sounds like a no-brainer, right? Well, DCA really only makes sense in a few cases.

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