Averaging In
Averaging in refers to a stock investing strategy that applies a dollar cost averaging principle to the investment of lump sums. It does this by spreading out purchases over a period of time.
For instance, suppose an investor wants to purchase $50,000 in stocks, but feesl uncomfortable doing so all at once. The investor might resolve to average in by investing $12,500 every six months over two years. However, in the short term, an averaging-in program will improve financial results only if the investor happens to begin it when the market is headed down.
When you practice a “dollar-cost averaging” investing strategy, you invest equal amounts of money (say $300 a month) over a specific period. It’s a little like systematic saving, except you put your money into stocks instead of a bank account.
(Dollar-cost averaging is one of many low-risk strategies you’ll learn about in our new free report, Stock Market Investing Strategy: …read more »
Here are four classic, profit-killing errors that all investors make from time to time. All can seriously hinder your stock market returns.
1. “Averaging down” without reconsidering whether you should have bought in the first place.
Many investors have made lots of money by “averaging in” to the stock of a well-established, well-managed company — that is, buying more as funds became …read more »
