dollar cost averaging


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dollar cost averaging

n.
Periodic investment of a fixed dollar amount, as in a particular stock or fund or in the market as a whole, on the belief that the average value of the investment will rise over time and that it is not possible to foresee the intermediate highs and lows.
References in periodicals archive ?
The Automatic Purchase Plan takes advantage of dollar cost averaging to grow investors' precious metals ownership each month, eliminating concerns about timing their metals diversification strategy with the market.
This table shows how dollar cost averaging can result in a better average share price than trying to time your purchase.
So, the idea with dollar cost averaging is simple: spend a fixed dollar amount at regular intervals (e.
And since dollar cost averaging involves continuous investment in securities, you should consider your ability to continue purchases through periods of low prices.
Experts say dollar cost averaging is best for people who don't have a lot of money to invest but who can be consistent with a small monthly investment.
In dollar cost averaging, the investor takes the same dollar amount or percentage of savings each month and buys a stock or mutual fund with it, so that the purchase price averages out over time.
Since the focus of dollar cost averaging is on long-term results, rather than the short-term value of your holdings, it doesn't really matter whether prevailing market conditions are strong or weak when you begin to invest.
An investment strategy known as dollar cost averaging can be especially effective during a market downturn.
In volatile markets, these new features allow clients to take advantage of the enhanced Fixed Account rate for the short-term, while Dollar Cost Averaging to one or more investment accounts, including the Lifestyle Portfolios, for long-term growth potential.
It provides a guaranteed return, and we do dollar cost averaging from the principal protection plan to an age-based investment portfolio, so the structure shifts as her daughter gets older.
With dollar cost averaging, the price swings are washed out.
SogoInvest customers can take advantage of Dollar Cost Averaging and compound interest returns, in addition to buying and selling fractional shares, which can be purchased at any dollar amount.