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DCA vs Timing the Market

By InvestTool TeamUpdated: March 20264 min read
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The phrase "Time in the market beats timing the market" is backed by decades of statistical evidence.

The Fear of the Crash

Many beginners hold onto large sums of cash, waiting for the market to drop so they can "buy the dip." The mathematical problem with this strategy is that while they wait, the market continues to compound upwards.

Historically, missing just the 10 best trading days in a decade can cut your overall returns in half.

The DCA Solution

Dollar Cost Averaging (DCA) completely removes human emotion from investing. By investing $500 on the 1st of every month, you naturally buy more shares when the market is crashing, and fewer shares when it is expensive.

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