What are the Benefits of Dollar Cost Averaging

[Onachukwu]

• Risk reduction. Dollar-cost averaging reduces investment risk, and capital is preserved to avoid a market crash. ...
• Lower cost. ...
• Ride out market downturns
• Disciplined saving. ...
• Prevents bad timing. ...
• Manage emotional investing
• Higher transaction costs. ...
• Asset allocation priority.

 

[Carson20t]

After going through a couple of discussions I have learnt that generally it helps reduction on losing out on your investment.But how is it done,is it that you continue to add a dollar per stock or what? How does it help sustain or protect your investment?

 

[HayKay]

Dollar cost averaging allows you to earn and structure your investment better; you don't get to lose out entirely even if one move goes wrong unlike when you just dive all in to the investment.

 

[Sincerem]

Investing a fixed amount would certainly minimize losses as you don't go into the investment with all your capital but it is broken down as with leverage in the forex market so you can buy more shares with the same amount continually.

 

[Nomad]

I have heard of this term but do not know exactly what Dollar Cost Averaging actually implies. If I invest in thew local market by using local currency, does Dollar Cost Averaging still apply to my investing strategy?