What stops most people from investing in (or returning to) the share market is not knowing when to jump in. Although nobody knows exactly when a market or a particular share price has found its base price, we can employ a strategy to remove this speculation and focus on a longer term investment plan.
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Dollar cost averaging is quite simply investing a fixed amount at set intervals so an investor buys more units/shares when the price is low and less when it is high. Over time the costs average out and the investor usually ends up with more assets than if they were “timing the market” (which is a definite no-no).
Other benefits of dollar cost averaging include:
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