Displaying items by tag: dollar cost averaging
Dollar cost averaging (DCA) is a type of investment strategy where an investor will make constant dollar amount contributions to an investment at regular intervals. This theoretically reduces the risk and smooths out your purchase price over the course of time that you are contributing. The idea is that you are buying more shares of an investment when the price is low, and less shares when the price is high. I will show you that Lump Sum investing is superior to DCA investing using historical data of the S&P 500.