What are the Benefits of DCA Investing?

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I am currently on a journey to become a millionaire for retirement. My wife and I stared with 0 several years ago, and we’ve had some ups and downs on our journey. My goal is to learn how to do this better and share this with others. If you want to learn and become a millionaire in retirement too, then follow along!

In this post, I explore the benefits of DCA or dollar-cost average investing.

What are the benefits of DCA investing? Dollar-cost averaging (DCA) is the practice of investing a consistent dollar amount in the same investment over a period of time. Let’s focus on two major benefits of DCA investing:

1. REDUCE EMOTION. By investing mechanically, you will take the emotional component out of your decision-making. You will continue on a preset course of buying a certain dollar amount of your preferred investment irrespective of how wildly the price swings. This way, you will not bail out of your investment when the price goes down in a wild swing, but rather see it as an opportunity to acquire more shares at a lower cost.
2. AVOID BAD TIMING. If you invest your money all at once in a particular investment, there is the risk that you will invest just before a big market downturn. Imagine you had jumped into an investment just before the market downturn that began in 2007. You would have ended up losing more money than if you had invested only some of your money before the downturn. It’s extremely hard to time a market bottom, but by dollar-cost averaging you can still take advantage of an investment as it increases in value over time.

In Application

In reality we are still paying down debt so are not investing as much as we would like.

My are currently focused on maxing out one of our Roth IRAs. My wife also has an employer match on her 401K to a general stock market mutual fund, so we are using that to accumulate. As we zero out debt, we will focus on increasing monthly investments.

I am currently focused on DCA’ing into Bitcoin and these ETFs and stocks monthly:

$TGT
$HD
$JEPI
$SPY
$IAT
$VNM

We have a long road ahead, but we are on the road. I encourage you to join us!

How To Start

If you are new to investing, I suggest you start where I did, with Stash.

It is designed for long-term, DCA investing and financial education. Use my link and we both get a little bonus: https://get.stash.com/?code=alex8vrzh