Why is dollar cost averaging (DCA) the safest investment strategy with the strongest returns?

A Thread

What is DCA?

Dollar Cost Averaging is consistently investing a dollar amount into a position over a period of time

So instead of investing $1k into $BA

I would invest $100 every week for 10 weeks

This

- increases exposure
- reduces volatility
- reduces market timing & FOMO

1. Increasing Exposure

You want to always be Investing in the Stock Market

If you missed the 10 best trading days in the past 20 years, your total return would be cut in half!

DCA creates a consistent schedule for you to always be investing without much hassle

2. Reduces Volatility

Sometimes stocks are up & sometimes stocks are down

DCA encompasses all of those swings and averages them out

3. Reduces Timing the Market

Since DCA slowly enters into positions, you don't have to worry about buying in at the right time

No buy low and sell high trades

Just buy consistently and hold for long term growth

3.1 No Fear of Missing Out (FOMO)

DCA is not a get rich quick scheme which most FOMO investors like to chase

Its an investment strategy that allows you to increase your odds of making a profit over a period of time

Chasing a green graph isn't a part of the strats

DCA also gives me peace of mind so I never panic during red days or rush to sell during green days

Its super easy to set up and just as easy to forget you set it up.

Its the perfect lazy man strategy to becoming a millionaire

What strategies are you using when investing?