Live Spot Pricing
Gold Ask $1,904.01 trending_down -$15.37
Silver Ask $22.92 trending_down -$0.28
Platinum Ask $913.38 trending_down -$8.24
Palladium Ask $1,254.66 trending_down -$5.14
Hall of Knowledge
< All Topics
Print

What is dollar cost averaging?

 

It can be very difficult and time-consuming to follow trends in the precious metals market. Many factors can affect the price, making it nearly impossible to buy at the lows and sell at the highs. Instead of spending hours trying to find the right time to buy, many investors use the strategy of dollar-cost averaging. With dollar-cost averaging, an investor will create a regularly scheduled set of purchases over a period of time. No matter how the market moves on a daily basis, you continue to buy at the arranged intervals.  The method takes away the stress of timing the market correctly, while still being able to create large returns in the long term. 

Another strategy of investing is lump-sum investing. This method can be used to create a high rate of return as market values rise, but it also has increased risk. With any downturn in the market, your entire investment can see large losses. Dollar-cost averaging is better suited for risk-averse investors. Dollar-cost averaging is also a better option for those who do not have enough cash on hand to make a lump-sum investment. If you think dollar-cast averaging is the right method for you, make sure to do your research beforehand, set up a timeline that works for you, and be willing to change your strategy based on the market.

Table of Contents