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Dollar Cost Averaging = Smarter Investing.

Posted by Brad Blue on 9/12/2016

 

 

 

Are you in stocks?  If so, you know trying to guess when a stock is at its best price usually doesn’t end well.

There’s a way to help you buy more stock when the price is low, and less when it’s high.  It’s called “Dollar Cost Averaging”. It’s not as complicated as it sounds.  In fact, it’s really simple.

All you have to do is buy the same dollar amount of a stock every month.

Let’s say you want to invest $100 every month in a company with a great new product.  The first month, imagine the stock is valued at $50 a share, so you buy 2 shares.  Now, let’s say, the price drops the next month to $33 a share, so your $100 buys 3 of them.  Then, let’s say the stock price skyrockets the third month to $100 a share.  So you just buy one share that month.

Now look at what’s happened.  Dollar cost averaging has forced you to buy more shares when the price is low and fewer shares when the price is high. 

Buying more when prices are low?  That’s a good way to start if you want to clean up in the market.

Do us a favor please.  Tell your friends about us so they can be smart about their money too.

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Topics: Video Blog, Investing, Saving

Meet the blogger

Brad Blue

Brad Blue

No matter what Brad were to say about himself in this bio, it would be easy to find the truth about him with a simple google search. This applies to business as well, and the new business rules created by such transparency are what make Brad look forward to each day spent working in online Marketing at Logix! If you really were thinking about running a search, you’d mostly find lots of stuff about the CSU Rams, some truly awful puns, and many gushing posts about his wife and new daughter.

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