People make financial decisions for a plethora of reasons. While we may understand that it makes more sense, financially, to invest extra cash in the market, sometimes pulling the trigger on a lump sum can lead to anxiety and regret.

So how can you feel better about making that investment? Using a strategy called dollar cost averaging (DCA). Let’s say you have $10k in cash and want to invest but you’re feeling skittish based on the current state of the market. Mathematically, it makes the most sense to go ahead and put all that money right into a low cost index fund but math doesn’t help everyone sleep at night. If you know that watching the market will create stress for you, you can invest that $10k at $1k per month over the next year. 

What are the pros to this strategy? First, if you put $1k in and the market goes up, you make money and you are happy. If it goes down, you now get to invest the next $1k while the market is on sale (i.e. the cost is down). It is a win-win, emotionally.

The best way to ensure your financial future is to make sound decisions that feel good. Listen to this week’s podcast to learn more about DCA and whether it is right for your portfolio management.

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

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