UTF - Dollar Cost Averaging Vs. Lump Sum For My Income Portfolio
- Dollar cost averaging (DCA) makes it possible to build an equity position or a portfolio incrementally as you have money available.
- This strategy also minimizes the risk from a sell-off by spreading purchases over time.
- Conversely, lump sum investing immediately exposes the entire investment to market fluctuations, making it possible to fully benefit from an eventual rise in stock prices.
- Lump sum investing also poses substantial risks when stock prices fall.
- From my experience, using a combination of these two approaches is the best way to invest.
For further details see:
Dollar Cost Averaging Vs. Lump Sum For My Income Portfolio