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LESSON 6


           DCA: DOLLAR COST AVERAGE












             Dollar-Cost Averaging Builds Wealth Overtime!



             1. What Is Dollar-Cost Averaging?

             a. Periodically buying shares of the same stock
             b. The first of every month you buy shares,



             Let’s say you buy 1 share of a stock at $10 and the price falls to $5. You buy
             another share at $5. So you have 2 shares worth $15(average cost per share is

             7.50/share). If the stock price goes to $8, you are s�ll in profit even though you
             ini�ally bought at $10; this is because two shares are worth $16, but you paid
             $15. It doesn't ma�er that you ini�ally bought a share at $10; therefore, you

             never go all in at one �me.



             Lessons: Pick a �me frame, once a week, once a month, whatever, and buy the
             same number of shares for the long-term. You will be profitable! This lesson is
             short and simple, but emo�onally, it is hard. Many people see the price of an

             index fund go up and down; this makes people want to sell. But have the
             discipline to stay consistent and stay the course.

































                                          Sankeethan Ratneswaran – 2021 Copyright                                      15
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