Dollar Cost Averaging Investing | Explained for Beginners

Описание: Dollar cost averaging is a great way for beginners to get started investing and this video is simply explained for those looking to get involved in the stock market. Dollar cost averaging is an investing strategy where you invest small amounts on a regular basis.

The term, dollar cost averaging, refers to an investing strategy in which you regularly invest the same amount of money into your investments. You set a weekly or monthly budget and use that budget to increase your positions in the investments that you own. You can apply dollar cost averaging in stocks, ETFs, mutual funds, bonds and really anything else! It can be a great way for beginners and expert investors to build wealth through investing.

Dollar cost averaging has many benefits of doing so. Timing the market is extremely difficult to do correctly, so this strategy helps you stay profitable, without having to time the market. Also, most people don't have large sums of money to dump into investments all at once. Instead, dollar cost averaging gives you the opportunity to build up to that large sum, while earning interest and growth along the way. Lastly, investing can be an emotional rollercoaster ride as the market changes in value. By investing the same amount on a regular basis, this strategy removes the emotional bias from the equation.

There are some downsides associated with dollar cost averaging. Lump sum investing, where you deposit and invest large amounts at once, can sometimes outperform dollar cost averaging. With correct timing, lump sum investing can put you ahead. Keep in mind this can be very difficult to do. Additionally, this strategy can produce higher trading and commission fees as you buy in on a regular basis. This is important and something to watch, but hopefully the gains made in your investment will offset these fees.

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🕒 Time Stamps!
00:00 Intro
00:28 Dollar Cost Averaging
01:01 DCA Perks
01:33 How it Works
02:13 SPY Example
04:31 Comparison
05:04 Benefits
06:11 Drawbacks
07:31 Thanks for Watching!

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Disclaimer
This channel is for entertainment purposes only and is not investment advice. All videos published on this channel are informational in nature and are not intended to give advice or recommendations about any particular security or investment. Before making any investment decisions, I would recommend that you to speak to a financial professional that is qualified to provide advice.