Dollar-cost averaging is a simple technique that entails investing a fixed amount of money in the same fund or stock at regular intervals over a long period of time.
Basically you simply invest the same small amount of money on a regular basis irrespective of what is happening in the market.
I use dollar cost averaging when I invest in treasury bills on a monthly basis. The interest rates keeps varying but I don’t care what is happening. I simply invest the same small amount on a regular basis.
I have automated this financial decision by placing a standing order which deducts money off my salary account and sends it to Crested Capital every month. This reduces my mental resistance to make the investment decision. This transaction happens every month no matter what. It does not matter whether BOU is being investigated. It does not matter whether teachers are striking. I don’t care whether there is an Ebola out break. It does not matter if the opposition is not happy with NRM. It does not matter if I am not feeling happy.
I can’t control all these external events. The only thing I can control is my decision to invest on a monthly basis. No excuses.
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