Show Notes For This Episode

 

We have a fascinating investment topic for you today – dollar cost averaging (DCA). For those who don’t know, it’s the practice of investing a fixed dollar amount on a regular basis regardless of the share price. It’s been a method that investors have used for a long time, but how well do you understand the strategy?

In this episode, we’ll explain DCA and reverse dollar cost averaging, which many people might not know about. That is the process of systematically taking money out of your portfolio and using it to pay for living expenses. That distribution period is just as important as accumulation, but people don’t spend as much time planning for it.

We’ll explain why dollar cost averaging and reverse dollar cost averaging is so important and why it’s never a good idea to try and time the market. That’s where the sequence of returns comes into play, and Michael will explain how that applies to your income plan in retirement.

On this episode, we’ll share:

  • What is dollar cost averaging? (2:34)
  • Why you want to use this tactic, even in down markets. (4:46)
  • How does sequence of returns play a part in your retirement? (5:35)

 

Dollar Cost Averaging (DCA) does not assure a profit or protect against a loss in declining markets. DCA involves continuous investments over time regardless of fluctuating price levels. Investors should consider their ability to continue to invest in periods of low-price levels. 

If you have any questions about how you can better prepare for your retirement future, don’t hesitate to reach out to Michael Schulte for help.

He’s a Financial Advisor and Certified Business Exit Planner at WestPac Wealth Partners. His daily mission is to help families and business owners make smart financial decisions so they can live on their own terms for the rest of their lives, regardless of what life events and opportunities come their way.

Call Michael at 702-767-4897 with any of your questions or email michael.schulte@westpacwealth.com.

 

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