Spread your risk, lower your entry price – the beauty of dollar cost averaging
Are you weighing up when to enter the market? Are you waiting for just the ‘right time’ to make that investment? Are you a little wary of buying in? Well, perhaps dollar cost averaging (DCA) is your answer.
Sometimes there is that moment of hesitation before making that initial investment. Perhaps by dividing up the amount you intend to invest and buy smaller amounts, at regular intervals, you can not only decrease your risk but perhaps also pay a lower average price over time.
Let’s look at an example: you could either invest $12,000 in one lump sum at $10, resulting in 1,200 shares. Or you could invest with equal amounts of $1,000 each month.
Using DCA, that same $12,000 over the year, resulted in an average price of $9.57, as you take advantage of buying more shares at a lower price!The key with DCA? Sticking to it. If you start this process, the real benefit of investing when prices are indeed cheaper, requires discipline. If you can stick to your guns, DCA may just be for you.
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Outrageous Predictions 2023: The War Economy
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French President Macron resignsThe political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
Gold rockets to USD 3,000 as central banks fail on inflation mandateAs markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
EU Army forces EU down path to full unionWith continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
A country agrees to ban all meat production by 2030In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
UK holds UnBrexit referendumFollowing a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
Widespread price controls are introduced to cap official inflationHistory tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve assetSanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
USDJPY fixed to the USD at 200 as Japan overhauls financial systemFollowing the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
Tax haven ban kills private equityWith the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.