Excellent work mastering age-based strategies! Now let's learn about dollar-cost averaging (DCA) - a simple strategy that removes guesswork from when to invest.

DCA means investing the same fixed amount on a regular schedule, regardless of whether markets are up or down.

Engagement Message

Do you currently invest money in regular amounts, or do you invest lump sums whenever you feel like it?

Here's why DCA is powerful: nobody can consistently predict whether markets will be higher or lower next month. Even professional investors struggle with market timing.

DCA eliminates this problem by investing steadily over time, letting market ups and downs average out naturally.

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Have you ever tried to predict the perfect time to invest or buy, only to see the price move the opposite way?

Let's see DCA in action. Imagine you invest $500 monthly in an index fund. Some months you buy when the price is high, other months when it's low.

Over time, your average purchase price smooths out - you avoid the risk of investing everything right before a market crash.

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Which feels less stressful: investing $6,000 all at once, or $500 per month for 12 months?

Here's a real example. Say your index fund costs $100 per share in January, $50 per share in February (market crash!), then $75 in March.

Your $500 monthly buys 5 shares, then 10 shares, then 6.67 shares. Your average cost per share becomes $71.43 instead of $100.

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How did scooping up extra shares in February affect your average cost per share?

This is why market volatility actually helps dollar-cost averaging! When prices drop, your fixed investment amount buys more shares automatically.

When prices rise, you buy fewer shares. Over time, this mathematical effect works in your favor without requiring any decisions from you.