What is Dollar Cost Averaging? (Dollar Cost Averaging Explained)

What is Dollar Cost Averaging? (Dollar Cost Averaging Explained)
Perhaps the easiest investing strategy to employ and one that will lower your risk, dollar cost averaging is a great method for everyday investors. Many people are unaware that they already use this strategy in their 401k and individual retirement accounts. Don't panic and try to time the market when things are uncertain and then wait for things to recover after times of turmoil. Is dollar cost averaging better than lump sum investing? Use this strategy to ensure you're not sitting on the sidelines when others are making their fortune and you're not losing your hat when the market crashes.

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DISCLAIMER: Nothing published on my channel should be considered personal investment advice. Although I do discuss various types of investments and strategies, I am not a licensed professional. Please invest responsibly.

[RepostCollection]

I learned more here than I did during economics college classes

[mathisnotforthefaintofheart]

Dollar cost averaging has really worked for me. I entered the market when it was high (over a year ago) and in February my portfolio was a financial mess. Nothing wrong with the fundamentals of my stocks, it's just that everything was down. I decided not to buy stocks of a new company anymore but to work with the 25 positions I have and to buy when the market was down for two or three days in a row. And this helped...I mean it helped A LOT. Because now my average cost price is considerably lower than it was 10 months ago and though I am still at a loss, percentwise it is far less. And a couple of positions are at a slight profit, though I am not selling. On top of that, dividend is still coming in which I also use to buy stocks on a rainy day. I am investing in a ROTH so no tax complications. Dollar cost averaging is great if the companies in which you invest are sound, you have enough money over time to keep on buying and you have patience.

[InvestinginYou]

I love dollar cost averaging. I personally think it’s the best way to invest in the stock market.

[silvomuller]

Sorry to break the positive vibe in the comments, but dollar cost averaging is not the best strategy to invest into an index. It has been proven that an all-in as soon as possible strategy is superior. This info was not commonly known when it was new pf course, but nowadays you can even read it at Wikipedia.

[MiikeFaber]

Insightful video. I just want to know best how people split their pay, how much of it goes into savings, spendings or investments. I'm 27, and earn nothing less $150k per year, but nothing to show for it yet.

[NaamWynn]

This is my to go strategy. Most gain for the least amount of work!

[TK_GX]

i can concur. i always lost money and let emotion get to me when going all in so to speak. thanks for teaching me this strategy. Long term patience will be more rewarded, definitely.

[HiddenFreedom]

DCA is just another tool in the shed so to speak. Great explanation. Another tweak I like is when the market does decline by 30-50%, super charge your investments by stepping up how much you're adding. Still DCA, but just adding even more when it has declined.

[elonmusk]

It’s funny because when I started investing about 16 months ago, I started by DCA & didn’t even know what I was doing 😅 I was just buying stock in quality companies like VZ, JNJ, KO, MCD etc every week, putting 400$ in a week & splitting it between 8 different stocks, occasionally switching up stocks like every 6 months once I learned about diversifying my portfolio.

I now have 30k invested (28k of my own) and it’s 60/40 between individual stocks & broad market/growth ETFs such as SPY VOO SPHD VYM & VTI, while my individual stock portfolio touches all 11 sectors.

[MelissaShares]

It’s such a feel good concept! So glad you covered it on your channel, Chris!

[bluecollarmoneyinvestingch]

Great explanation of dollar cost averaging! Works great if you are investing in index funds or using a platform that allows you to buy partial shares so you can invest a fixed amount every month.

[NickPeitsch]

Just started dollar cost averaging on the S&P 500! It will surely be profitable in the future.

Solid video 👍

[ss_mark]

Highly interested in that color changing marker. 🤨

[unleashingfromwithin]

Wow man! The content you deliver on your channel is truly unique! I mean it's not the basic stuff you can find everywhere else and your presentation style is authentic! I have a lot of respect for what you are doing here and I can definitely learn a lot from you! Greetings from Germany!

[beingdonna]

This is how I have mostly invested overall. Apart from paying the mortgage the vast majority of our money has been invested in retirement accounts depositing a certain percentage each fortnight over the years. It has definitely been a long term game but has paid off for us.

[remmiellis]

People do this every day by contributing into their retirement accounts - and find success that way. It makes sense when you see price per share fluctuate over time

[PassiveIncomeTom]

This is so true Chris! You covered it right from the start! This is a loooong term game.👍

[devonfer]

This has been the first and only video I needed to watch on Dollar cost averaging. Thank you. Explained down to the 'T'

[joebond]

I do this, buy a position on the Nasdaq every time it hits a major support zone on the 1 hour time frame and take nice profits. If it keeps going down I leave the position alone and buy another position when it hits the next support

[mbank]

So bottom line is, DCA is just basically you investing consistently regardless what happens in the market