Learn How to Build Wealth Volume 3–Dollar Cost Averaging
Dollar cost averaging is a great way to build up our investment portfolio. There are two things that will help our dollar cost averaging investment strategy to work:
- commitment to invest over time,
- selecting a good investment.
Make sure that there has been sufficient research done before committing to an investment. A certified financial professional can help select an investment to meet SMART needs. Before choosing a professional make sure all the fees are identified and understood before proceeding.
Another component to dollar cost averaging is committing a fixed dollar amount to regularly scheduled purchases over time. By doing so fewer shares or units are purchased when the price increases, and more shares or units are purchased when the prices decrease. This way of investing works really well in an investing world where prices of shares and units change drastically over a period of time, and end up about the same price as they started. The affect of dollar cost averaging reduces the overall cost of purchasing shares over time.