Fast Finance

Dollar Cost Averaging

Dollar Cost Averaging Explained

In this week’s Fast Finance lesson, New York Institute of Finance instructor, Jack Farmer, explains Dollar Cost Averaging. Dollar Cost Averaging forces you to buy stocks on a regular basis, so that over time, you will pay the average price for the stock. Therefore, you aren’t going to buy the low or sell the high, but you’ll get a fair price for the stock and overtime you will accumulate a valuable asset.

One important element of dollar cost averaging to keep in mind: Since you will be buying stocks on a regular basis, you will now have more transactions than you would if you were trying to time the market. So if your transaction costs are very high, then dollar cost averaging may not be the correct strategy to use. You should use Dollar Cost Averaging when investing in No-Load Mutual Funds or other investments that don’t have a fee each time you invest.

About the Instructor

Jack Farmer – Curriculum Director at New York Institute of Finance
Jack specializes in training and consulting solutions for portfolio risk management, FX and interest rate derivatives and trading, equity index and volatility trading, equity derivatives and structured equity products, financial statement analysis and hedge accounting.

Learn more about Mergers and Acquisitions

Learn more about Mergers and Acquisitions in our M&A Professional Certificate course. In this program, you will receive a comprehensive analysis of the major facets of the mergers and acquisitions industry and the skills engaged in executing all areas of transactions from pre to post-merger integration.

About NYIF

The New York Institute of Finance (NYIF) is a global leader in professional training for financial services and related industries. NYIF courses cover everything from investment banking, asset pricing, insurance and market structure to financial modeling, treasury operations, and accounting. The New York Institute of Finance has a faculty of industry leaders and offers a range of program delivery options, including self-study, online courses, and in-person classes. Founded by the New York Stock Exchange in 1922, NYIF has trained over 250,000 professionals online and in class, in over 120 countries.

See all of NYIF’s training and qualifications here.

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