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Mooers' Investing Journal
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The Power of Dollar Cost Averaging

Investing in the stock market can be tricky and challenging as there is no right or wrong way to invest. That said, some investing moves could be profitable while others may end up as costly mistakes. My investment goal is to build up a good quality stock portfolio for long term growth and returns. Inspired by the legendary Warren Buffett and his Berkshire Hathaway Portfolio,  I have been using dollar cost averaging to build up my position for my stock portfolio over time. Based on this strategy, I have attempted to invest equal dollar amounts at regular intervals in five high quality stocks of $Alibaba(BABA.US)$, $Apple(AAPL.US)$, $Bank of America(BAC.US)$, $Microsoft(MSFT.US)$, $NVIDIA(NVDA.US)$ that I have shortlisted to be fundamentally sound companies with strong long term growth prospects. As timing the market accurately is almost impossible, I have bought in these stocks at a range of different prices. With dollar cost averaging, I broke my investment into parts and bought into the stocks at equal time intervals at a set monthly schedule rather than using my capital to buy all the stocks at one go. I have allocated my funds equally to each these five stocks and set aside the same amount each month to buy an equal weightage of these stocks. There is no one best day to dollar cost average. By breaking my investment into chunks, it is more manageable for me financially and helps me to avoid trying to time the market. The lower transaction costs over at $Futu Holdings Ltd(FUTU.US)$ moomoo also help to reduce trading costs for the stock purchases. Over the course of Q3, the stock prices did not seem to change significantly from the average cost price despite the market volatility, especially in September, normally considered the worst month of the calendar year for investing. This Q3 was no different and the market was unable to beat the September Curse. With dollar cost averaging, I was able to buy more of the stocks with the same capital. But this may have worked better for Q3 as the stock prices did not keep rising. While dollar cost averaging may not be suited for everyone, it has worked well for me as it not only takes away the emotional stress and anxiety with trying the impossible feat of timing the market but also helps in refraining from the FOMO attitude towards investing. Most importantly, it aligns well with my investment goal of building up a high quality stock portfolio that can withstand the test of time and any market upheavals.
$Dow Jones Industrial Average(.DJI.US)$
$Nasdaq Composite Index(.IXIC.US)$
$S&P 500 Index(.SPX.US)$
The Power of Dollar Cost Averaging
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more
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  • 101767718 : Good sharing, this method is something new to me. I have learned a lot from this. 👍

  • Jeet Kune Do : Very good writing sharing useful investment strategies

  • 102089245 : I admire how this strategy works so well for you. It's not easy at all to follow and need strict discipline 💪

  • HuatEver :

  • HuatEver : A wise way to have divided your shares’ investments into equal portions because should you get “burnt” the impact is less devastating. Effective cautious move, kudos.

  • Southern Eagle : I think this can be good as you do not have to keep worrying about price going up and down. Less stress too Thumbs Up

  • HuatLady : This strategy is something new new to me but I don't mind adopting it for the long term. Remember it is more prudent to save money for better days. High quality shares like $Apple (AAPL.US)$, $Microsoft (MSFT.US)$ , $Alibaba (BABA.US)$  are worth considering.

  • garay : Very good and informative sharing! Dollar cost averaging has proven to beat strategies such as timing the market in the long run. It’s almost impossible to have the perfect timing to get a stock at its lowest. Fundamental analysis coupled with DCA would be a strong strategy in the long run.

  • HopeAlwaysOP Southern Eagle: When we invest the same amount of money monthly and strictly stick to it, there will be lesser reasons for us to worry about price fluctuations. Smile

  • GratefulPanda : Very sensible and steady Respect I have been dca-ing into the sti etf but will look into dca-ing into the u.s. stocks as well. Thanks again for sharing, wise words as always Thumbs UpThumbs UpThumbs Up

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Mentor Moo
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