Should I use the Dollar Cost Averaging strategy or Lump Sum strategy?
(THREAD)
Dollar cost averaging (DCA) is a recurring investment strategy where the investor decides how much to invest and every how often. It could be once a week, once a month or once a year. Personally, I do once a month as that’s when I receive my salary.
DCA is good for people with lower risk tolerance, a long term mindset and don’t have a large amount of cash in hand at their disposal when starting their investing journey.
Lump Sum strategy is when an investor decides to invest all the capital he has available in one go.
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