Article
Description:
Dollar cost averaging (DCA) is a method of steadily increasing the amount of stock you own by investing a fixed dollar
amount each month. Market fluctuations work in your favor because DCA allows investors to buy more shares of
stock when the price is low and fewer shares when the price is high. Although dollar cost averaging cannot guarantee a
profit or prevent a loss it typically results in a lower overall cost than a constant number of shares of stock purchased at
set intervals.
Objective:
To build a portfolio of stocks through a regular and disciplined program.
Suitability:
Investors for whom individual stocks are appropriate and who wish or need to invest regularly over time rather than
with one lump sum; investors who want to avoid the possibility of investing all their money at a market high;
investors who are nervous about market fluctuation.
Program Features:
o Available for over 250 stocks, including all stocks in the Edward Jones Model Portfolio.
o All investments appear on one consolidated statement -- with cost basis.
o Fractional and full shares are purchased, so shares accumulate faster.
o Dividend reinvestment is automatic for all stocks that pay dividends.
o The commission is a reasonable 2 percent or a $5 minimum per stock per month.
o Minimum investment $100/mo. per security for 12 months.
Dollar Cost Averaging is a long-term strategy and investors need to evaluate their ability to continue investing through
up and down markets.
Diversification should be of major importance when considering any investment.
This information is approved for use with the public.
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