facebookGiven the crisis right now, and the principles of Dollar Cost Averaging (DCA), is it a good time to increase the DCA amounf during a recession? - Seedly
Seedly logo
Seedly logo
 

Advertisement

Anonymous

25 Mar 2020

Given the crisis right now, and the principles of Dollar Cost Averaging (DCA), is it a good time to increase the DCA amounf during a recession?

My thinking is that you will "own" more stocks (as compared to when you keep it the same), and thus when the price go up, the value of your stocks will go up, and thus the amount you profit is higher.

Is that true?

3

    Discussion (3)

    What are your thoughts?

    Pang Zhe Liang

    Pang Zhe Liang

    25 Mar 2020

    Level 17·Senior Financial Services Consultant at AIA Singapore Private Limited

    Dollar cost averaging does not work all the time. This is especially true for single stocks. This is because the individual company may not survive the current situation and forced to get delisted from the exchange.

    More Details:

    Dollar Cost Averaging

    Instead, dollar cost averaging works better for funds, e.g. ETFs, unit trust. This is because of the diversification that it is able to achieve as compared to a single stock.

    I share quality content on estate planning and financial planning here.​​​

    Reply

    Save

    Share

      View 2 replies

      Write your thoughts