Basics of Dollar Cost Averaging

March 17, 2017

Dollar-cost averaging is a popular method of investing for the long term.

 

If you’ve been burned before by buying high and selling low, you may want to consider putting your investments on cruise control with dollar-cost averaging.

 

Dollar-cost averaging – the basic premise behind employer-sponsored savings plans like 401(k)s – is the practice of investing a set amount each month in a particular investment vehicle. As the share price of your investment fluctuates, so will the number of shares your set amount buys. Sometimes you’ll pay more and sometimes the stock or mutual fund will decrease in value, allowing you to purchase additional shares.

 

By year-end 2014, Americans had $24.7 trillion invested in IRAs, employer-sponsored savings plans and annuities, according to the Investment Company Institute’s 2015 Investment Company Fact Book. With the vast and varied information available on investing, many Americans have chosen to stop chasing yesterday’s high returns. Using dollar-cost averaging can help them ride out the ups and downs of the market.

 

Dollar cost averaging involves continuous investment in securities, regardless of fluctuating price levels. Investors should consider their ability to continue purchases through periods of low price levels or changing economic conditions. Dollar cost averaging does not ensure a profit and does not protect against a loss in a declining market.

 

Dollar-cost averaging isn’t for everyone. Short-term investors and those concerned about market volatility won’t benefit from the slow and steady pace of dollar-cost averaging. Always meet with a financial professional before investing. For those who want to invest a consistent amount each month and potentially lessen the effects of market volatility, it may be an option. Article by Securities America

 

Back to my page

Share on Facebook
Share on Twitter
Please reload

Featured Posts

Deciphering Financial Aid Alphabet Soup

July 7, 2017

1/5
Please reload

Recent Posts

October 26, 2018

Please reload

Archive
Please reload

Search By Tags
Please reload

Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square

801 S. Fillmore, Suite 530

Amarillo, Texas 79101
806.331.2600

advisor@navigationfinancial.com

Click to check the background​
of this firm FINRA's BrokerCheck

The BBB has determined this business meets accreditation standards, which include a commitment to make a good faith effort to resolve any consumer complaints. BBB Accredited Businesses pay a fee for accreditation review/monitoring and for support of BBB services to the public. BBB accreditation does not mean that th ebusiness products or services have been evlauted or endorsed by the BBB, or that the BBB has made a determination as to the business product quality or competency in performing services.

Navigation Financial Group is not a CPA Firm. Advisor Representatives are Registered Representatives of and offer securities through Securities America, Inc., member FINRA/SIPC. Planning and Advisory Services available through Securities America Advisors, Inc. $ymbil is offered by Ladenburg Thalmann Asset Management, Inc. (LTAM). Navigation Financial Group and its affiliates are independent of Securities America and LTAM. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. This site is published for residents of the United States and is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security or product that may be referenced herein. Persons mentioned on this website may only offer services and transact business and/or respond to inquiries in states or jurisdictions in which they have been properly registered or are exempt from registration. Not all products and services referenced on this site are available in every state, jurisdiction or from every person listed. Not FDIC Insured, No Bank Guarantees, May Lose Value. Not a Deposit and Not Insured by any Government Agency. As of January 1, 2020, the California Consumer Privacy Act (CCPA) suggests the following link as an extra measure to safeguard your data: Do not sell my personal inforamation.

© 2020   |   All Rights Reserved