When is dollar cost averaging a bad idea?
Dollar-cost averaging is an investment strategy where you invest a fixed amount of money at regular intervals, like monthly or quarterly, to reduce risk and avoid trying to time the market. It is often marketed as a universally safe, smart investing strategy—but it isn’t always the best move. In fact, there are clear scenarios where dollar cost averaging can reduce returns, introduce unnecessary costs, or create a false sense of security. 1.When the market is rising steadily (which it historically …
