Dollar cost averaging

1 · Erik Bernhardsson · April 26, 2016, 4 a.m.
(I accidentally published an unfinished draft of this post a few days ago – sorry about that). There’s a lot of sources preaching the benefits of dollar cost averaging, or the practice of investing a fixed amount of money regularly. The alleged benefit is that when the price goes up, well, then your stake is worth more, but if the price goes down, then you get more shares for the same amount of money. According to Wikipedia, it “minimises downside risk”, about.com says it “drastically reduces ma...