Dollar-cost averaging (DCA) is often favored as an investment strategy because it provides several benefits, especially for long-term investors. Here’s why DCA is considered “better” than lump-sum investing for some people:
1. Reduces Risk of Market Timing: By investing a fixed amount of money at regular intervals, you avoid trying to “time the market.” This means you’re less likely to invest a large sum just before a market downturn, as you’re buying at various prices over time.
2. Lowers the...