|
|
Article: Learn importance of dollar-cost averaging
- Article from:
- Post-Tribune (IN)
- Article date:
- March 10, 2002
- Author:
CopyrightCopyright (c) 2002 Post-Tribune. (Hide copyright information)
|
THIS ELECTRONIC VERSION MAY DIFFER SLIGHTLY FROM PRINTED VERSION
While diversification usually refers to investing across a variety of assets -- stocks, bonds, real estate, etc. -- in order to lower portfolio risk, you can also diversify across time. How? By spreading investments over a period of time, perhaps monthly.
Investing every month is a form of time diversification. When you invest monthly, you limit your risks of buying at market peaks. You also assure yourself of periodically buying near market low points.
An easy way to implement time diversification in an investment program is by using "dollar-cost averaging." Dollar-cost averaging (DCA) takes emotion out of the investment ...