{"id":911,"date":"2022-09-20T03:02:33","date_gmt":"2022-09-20T03:02:33","guid":{"rendered":"https:\/\/www.syfe.com\/au\/learn\/?p=911"},"modified":"2023-08-04T07:41:19","modified_gmt":"2023-08-04T07:41:19","slug":"what-is-dollar-cost-averaging-dca-and-its-benefits","status":"publish","type":"post","link":"https:\/\/www.syfe.com\/au\/learn\/what-is-dollar-cost-averaging-dca-and-its-benefits\/","title":{"rendered":"What is Dollar Cost Averaging (DCA) and its benefits<\/strong>"},"content":{"rendered":"\n
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What is Dollar Cost Averaging?<\/strong><\/h2>\n\n\n\n

Dollar cost averaging – often shortened to DCA – refers to an investment strategy that focuses on making investments at regular intervals in a systematic or consistent way. <\/p>\n\n\n\n

Let\u2019s unpack what that looks like in real terms: <\/p>\n\n\n\n

Whether it\u2019s A$1 or A$1,000 – a key part of dollar cost averaging is making consistent investments over time, regardless of what the market is doing. <\/p>\n\n\n\n

Example:<\/strong> Let\u2019s say you had decided you wanted to dollar cost average into an ETF that tracks the S&P 500 - like the SPDR S&P 500 Trust ETF or SPY.<\/pre>\n\n\n\n
This means you would make regular investments into SPY over a period of months, years, and even potentially decades. This is a key part of thinking about investing in decades, not days. <\/p>\n\n\n\n
Keeping with the S&P 500 example – some months the S&P 500 might be up, some months it might be down. The idea is that you continue to invest on a regular basis regardless of these short term price movements. That\u2019s where the average part – of dollar cost averaging – comes in. <\/p>\n\n\n\n
Benefits of Dollar Cost Averaging <\/strong><\/h2>\n\n\n\n
Dollar cost averaging is a great strategy for every level of investor because it helps smooth out volatility, overcome negative investor behaviours or bias (like buying high and selling low), and growing your wealth over the long-term.<\/p>\n\n\n\n
Dollar cost averaging also echoes the age old investment saying, that \u2018It’s not about timing the market, but about time in the market.\u2019<\/p>\n\n\n\n
How Syfe helps you Dollar Cost Average (and stay consistent)<\/strong><\/h2>\n\n\n\n
Arguably the hardest part of dollar cost averaging is staying consistent when markets are volatile and uncertain. Those negative biases we mentioned above. <\/p>\n\n\n\n
Syfe solves that problem by making dollar cost averaging an incredibly simple process through our powerful recurring buy feature<\/strong>. <\/p>\n\n\n\n
With recurring buys you can choose any US stock or ETF you want to invest in, and:<\/p>\n\n\n\n