Market Timing, Valuation, and Systematic Purchases I have a lot of work to do but I’m sitting at my desk, the snow is on the ground outside, I have a fresh cup of coffee in front of me, and I don’t really feel like diving into my task list quite yet. This is going to…
Dollar cost averaging is one of, if not the, most important strategy new investors should learn before they start putting together their portfolio. In fact, dollar cost averaging can help you avoid major losses, lower your overall cost basis, make market crashes easier to handle, and take the emotion out of the investing process.
How We Used Shares of Coca-Cola to Teach My Youngest Sister About Investing (and Why the Cycle of Consumption and Financial Stress Starts as a Teenager for Most Americans)
When I was a senior in high school, I bought my youngest sister a single share of Coca-Cola common stock for her 6th birthday. It’s been a teaching mechanism throughout her life; one that is far more important and beneficial from an academic and educational standpoint than any investment return it could generate.
How My Grandpa Dennis Could Have Turned His Pepsi Habit Into a 7-Figure Estate I’ve written in the past about how nearly every American alive today has been confronted with perhaps a dozen different companies that they knew first hand because they enjoyed using the firm’s products for years (in some cases, their whole life)…
How Investors Who Practiced Dollar Cost Averaging Were Richer Within Only 2 Years of the Credit Crisis Meltdown
Citing data provided by Vanguard, one of the premier mutual fund and 401(k) providers in the world, The New York Times recently reported that 60 percent of 401(k) accounts now have more money in them than they did before the stock market crash and worst recession since the Great Depression began two years ago.
A family member recently used dollar cost averaging and the power of compounding in such a creative way, that I thought it would be useful to share it. This technique, which he developed after studying the various returns available on different asset classes, was designed to show that two factory workers, both earning the same salary, paying the same taxes, and having the same expenses, could end up with vastly different levels of wealth based on what they did with their surplus cash each month. Let’s take a look at this dollar cost averaging technique and how he hopes it will help him earn several extra hundred thousand dollars in profit over the coming decades.