Dollar Cost Averaging
DCA (Dollar Cost Averaging) vs LSI (Lump Sump Investing)
In stock market past performance cannot guarantee the future performance because every bear market decline, crash and panic.
DCA is simply where you invest same amount of money at regular intervals: every month, year or week regardless of market trend.
It will force the invester to buy more when the price is low and less vise versa.
Benefits related to DCA is that the invester will not be devasted by the losses that come along.
DCA encourages you to be patient and stick to the market for a long term during ups and down.
Month 1 : Stock Price $10 Bought 50 shares
Month 2 : Stock Price $5 Bought 100 shares
Month 3 : Stock Price $5 Bought 100 shares
Month 4 : Stock Price $15 Total 250 shares