The stock market and The Basics of Investment


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Dollar Cost Average

Invest a fixed amount at equal time intervals ( for example, you could buy 200 each of stocks every week, every month, or every quarter) and continue to do so over a long time.

For example, 1 year, or more... You have more shares when prices are relatively low and less shares when prices relatively high. This results in lower average per share cost over time.

Buying an minimum amount of dollars each of securities so that commision cost is <=2% is better. For example, commision cost for each of securites is $4. You should buy minimum $200 each.,

Dollar Cost Average allow investors to ease into the market over time, which reduces the timing risk. It require no market forecasts. Its share price is approaching to its fair value for a long-term.

It means that DCA is a method allowing investors into the market that don't depend on up-down status of market.

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