You’re well on your way to being a powerful investor. You have the fundamentals, but we want to introduce you to another investing concept: dollar-cost averaging.
Dollar-cost averaging (DCA) is a term that refers to investing money on a regular basis, rather than investing a large lump sum once. Why?
- DCA helps manage risk. By investing small amounts over time, you can help protect yourself against the daily fluctuations in the market.
- DCA also removes the emotional aspect of investing. Seeing changes in the value of assets can make investors feel like they should’ve bought or sold, and this sometimes leads to impulsive decisions. With DCA, the strategy is not to buy a stock based on a short-term value change. Instead, you invest over time, which can include investing a set amount on a set schedule. By doing so, there is no pressure to “time the market,” which is something that even investing pros aren’t always good at.
And Qapital can even help do DCA for you. With the Set & Forget Rule, you tell us the amount and the schedule, and we take care of the rest. Dollar-cost averaging made simple.