#17 of “21 Critical Retirement Questions Answered” One at a Time by Gene Offredi CFP© RFC

Retirement Saving Terms And Issues

Q #4: “Can you explain dollar cost averaging?”

This is an investment concept usually involving consistently putting money in mutual funds on a monthly or quarterly basis. It’s called dollar cost averaging because you purchase more shares when your fund’s share price is lower and fewer shares when the share price is higher. This can lower the average price you pay for shares. But it doesn’t guarantee a profit or protect against a loss during declining markets.   Here’s an example of dollar cost averaging:

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