Email of the day on dollar cost averaging
Comment of the Day

March 25 2020

Commentary by Eoin Treacy

Email of the day on dollar cost averaging

Many thanks for the latest Big Picture Long-Term video. For the last ten years my forty-year old twins have been investing every month in the Vanguard Star Fund. My instinct is to advise them to continue this monthly investment as long as they have a regular income. What do you think about this strategy?

Eoin Treacy's view

Thank you for this question which may be of interest to subscribers. Dollar cost averaging works because you get to buy more during the declines and less at the top by never wavering in the amount regularly committed to the market. Therefore, it only succeeds in achieving in controlling the average purchase price if it is practiced, or initiated, during big market declines.

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