Investing in the stock market is a terrific way to grow your wealth over time but volatile markets may often dissuade investors from fully benefiting from long-term compounding Markets can fluctuate wildly day-to-day and make investors nervous about getting started, One way to mitigate short-term volatility is to dollar cost average into the market This strategy involves gradually investing a percent of your cash over time rather than investing a considerable lump sum all at once Simply put instead of investing $10000 at once you would instead invest $1000 every month for the next 10 months, Potential benefits of dollar cost averaging , Averaging into the market can be an effective way to approach investing for a couple reasons Dollar cost averaging helps reduce the risk of buying at the markets peak If you invest all your money at once and the market drops soon after you could suffer significant losses By averaging into the market you spread your investments out over time and take advantage of market fluctuations especially if…, Potential drawbacks of dollar cost averaging, Averaging into the market can also have drawbacks The strategy can be time-consuming and requires discipline to stick to a regular investment schedule It also requires a long-term outlook and patience as it may take several months or even years to fully invest your desired amount Investors could lose some upside if the markets rise quickly while they are averaging in Without the benefit of a…, Published March 2025