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.