Anonymous
Average what thing?
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Gabriel
18 Oct 2018
Undergraduate at National University of Singapore
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Nicholes Wong
18 Oct 2018
Diploma in Business Management at Nanyang Polytechnic
It is the cost of buying stocks regularly like every month. You set a fixed dollar amount like $200 to buy stock. When the price is low, you will buy more of that stock. When price is high, you will buy less of that stock. You can use regular savings plan to buy for you every month. You are supposed to buy it every month no matter what. This way you wont be scared to buy because its dropping, you will see it as a chance to buy it at a lower price.
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Basically dollar cost averaging (DCA) means you pump in a fixed amount of money every month regardless of the price. So when the price is low, you buy more units and when the price is high, you buy lesser units.