Face it, when it comes to trading & investing, we know very little. The very limited knowledge we have of trading and investing is what keeps our wealth just that, limited. Our DNA has been programmed to buy low and sell high. Always trying to time the market and then losing out. We refuse to think we are any less superior when it comes to investing or we believe luck has played its role in a negative way in everything we have done.
The truth of the matter is, the ‘tools’ that we know on how to trade as so severely limited, it is literally like only knowing the “+” (addition) sign in mathematics and nothing else, till later when you learn about minus, multiple and divide. The world changes. The outcome changes.
When buying sharing or doing trading on any sort of a market where prices fluctuate, there can be nothing more fundamental than learning what DCA is - or Dollar Cost Averaging. Simply put, DCA is spacing your buying practice at regularly timed intervals and averaging out in the long term. Rather than trying to time the market by buying low and selling high, which is difficult to do on a sustained basis, as you have no idea how and where the market will move. The next best thing you can do is to DCA your investments. Anyone and I mean anyone starting out with investing, should spend time learning what dollar-cost averaging is and how beneficial it can be to your investing strategy. If you don’t practice DCA, it is literally like being blind and trying to buy shares/stock/commodity/currency, etc.
Don’t be that person.
Here are a few great resources to learn from:
Next Week: The power of compound interest.