Tuesday, December 2, 2008

Suze Says: Dollar-Cost Averaging

On Saturday's episode, Suze Orman discussed dollar-cost averaging. Most pf bloggers know that dollar-cost averaging is a great way to invest in the stock market. Suze reiterated how important it is to continue to dollar-cost average even through turbulent markets such as these.

Definition, from Investopedia.com: "The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares are bought when prices are high."

Most people use dollar-cost averaging without even thinking about it: 401k elections are taken out with each paycheck, which is automatic dollar-cost averaging!

I dollar-cost average with my 401k and my Roth IRA with bi-weekly contributions of $75 and $100, respectively.

2 comments:

Small Budget, Big Style Chick December 3, 2008 at 9:13 AM  

I love Suze's show, but sometimes end up missing it. Thanks for your update!

Miss M December 3, 2008 at 12:52 PM  

I'm not a big Suze fan but she does have good advice. I dollar cost average my taxable investments too using an automatic investment plan.

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