Dollar Cost Averaging

 

This is the Toronto Stock Exchange (TSX) over the course of one year.  One of the cardinal rules of investing is BUY LOW and SELL HIGH. February, March and July would have been great months to buy! Unfortunately even we don’t have a crystal ball that allows us to know where the stockmarket will be month by month. Therefore the most efficient way of investing into the stockmarket is to do it regularly (monthly or bi-weekly) to take advantage of those months where the value is lower and you are therefore getting more shares for your money. In addition you’ll benefit from compounding returns.