Dollar Cost Averaging
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Dollar Cost Averaging is a way of investing a consistent amount in a particular asset to a regular schedule. It’s the opposite of a lump sum investment. The graphs below show you the effects of lump sum investments and dollar cost averaging in different market situations.
i. Adjust the investment period by shrinking/sliding the shaded region.
ii. The list will show the performance under different market situations

Hypothetical Data

Market Is Going Up
Lump Sum Purchases
Total Investment $12,000
Units Bought 12000.00
Average Cost/unit $1.00
Dollar Cost Averaging Purchases
Total Investment $12,000
Units Bought 4483.33
Average Cost/unit $2.68
When the market is going up, the average cost is higher with dollar cost averaging.

Hypothetical Data

Market Is Going Down
Lump Sum Purchase
Total Investment $12,000
Units Bought 480.00
Average Cost/unit $25.00
Dollar Cost Averaging Purchase
Total Investment $12,000
Units Bought 622.70
Average Cost/unit $19.27
When the market is going down, the average cost is lower with dollar cost averaging.
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