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The Power of Dollar Cost Averaging
Play the long game
There’s a lot of very poor financial advise floating around on the internet nowadays.
The main problem, is that a lot of people giving “advice” really only started investing in the stock market during the bull run we had in 2020/21, so they have not seen a full market cycle yet and don’t know how to act. Regardless, they still feel it is necessary to give their 2 cents on how to make money and “be successful”.
I’d like to introduce you to something called Dollar Cost Averaging (DCA), and if you look at how the stock market has performed historically over many decades, it is as close as it gets to a guaranteed return on your money invested in the markets.
Take a look at the above chart, it is tracking the price performance of the S&P 500 between 1950–2016. From a high level overview, what you will notice is that despite up and down fluctuations, the overall trend is that it continues to go up over the years.
The S&P 500 is an index that tracks the performance of the 500 largest companies listed on the stock exchange in the USA. It includes various sectors such as technology, real estate, consumer…
