Time in the market pretty much beats every strategy you’ve thought about.

It’s not wise to try to be sneaky, nor is it wise to time the market and “buy the dip”.

Let's talk about a strategy called Dollar-Cost Averaging

#FinanciallyFluentThread #DollarCostAveraging

Dollar cost averaging is a strategy used by investors to spread out your stock or fund purchases by buying at regular intervals and in equal amounts.

Popular #investment strategy as it ensures you aren’t pushing all of your money into the market at once.

Consistently investing.

Market goes up? You’re still investing that same amount each month.

You might not be able to buy AS MUCH, but you’re still invested.

Market goes down? You’re still investing that same amount each month.

When stock prices fall, you’ll be able to lower your average cost.

One of the key ingredients why dollar-cost averaging works is because it takes the emotion out of investing.

Especially for newbie investors, this is a strategy that can be helpful in getting you into and staying in the market.

Simple wisdom: timing the market doesn't work

You are likely using the dollar-cost averaging strategy within your 401(k).

Assuming you get paid every 2 weeks, part of your paycheck goes directly to your 401(k) and purchases whatever asset you have set up.

*Side Note: You should know what assets your 401(k) is purchasing.

If you’re looking to implement this strategy, consider these three things:

1) How much can you invest each month?

2) Research the type of asset you will hold for the long term

3) Set up automated withdrawals from your bank account into your brokerage account

Regardless of the amount of money you’re able to invest using dollar-cost averaging, it is best suited for a long-term strategy.

That should give you a good understanding of dollar-cost averaging and if it's a good strategy for you.

#financiallyfluent #investing #stockmarket