To The Moon

Throughout my investing journey, I frequently struggle with these thoughts:

💭 “If only I bought the stock the other day, I would have gotten the stock at a way lower price😖 I knew it might go up anytime‼️” or

💭 “Silly mistake🤦🏻‍♀️ I should have bought this stock later‼️ I knew the market was going to go down‼️🙁😩😤

These thoughts somewhat take away my joy in investing as I want to buy a stock at the lowest possible price and even buying at a fairly low price (e.g. getting GOOGL at $91+ instead of at its lowest of $83+ when the stock was previously $140+) makes me feel frustrated with myself at times…Fellow 🐯🐯🐯 do you experience this as well❓

Being able to time the market accurately⏰📈/📉 is an extremely hard skill to master and it’s almost impossible that we would be able to buy the the stock we want at its lowest price during a certain given period. I often read about a recommended investment strategy called Dollar-Cost Averaging (DCA) which is supposed to counter this situation above but I have never tried it out myself. At the same time, I’ve read quite a number of comments in the community about:

(1) buying a certain stock at a high price and applying DCA by buying more shares at a lower price in order to bring the overall cost down, or

(2) DCA-ing until they’ve run out of money💸💸💸 & their holding is still deep in the red, that DCA doesn’t work & they regret doing DCA…

⭐️⭐️⭐️ I hope that this post helps you to better understand DCA & debunk all your previous misconceptions😉 The 1st important thing to know is that Averaging Down is actually NOT the same as DCA💡What⁉️Really🤔❓

🤔💭: What is DCA?

📝: DCA is the practice of investing a consistent dollar amount in the same investment (e.g. Stock/ETF/Bond) over a period of time. This period of time can be daily (except when markets are closed), weekly, or monthly. As the dollar amount is consistent, when the share price is higher, we get fewer shares; when the share price is lower, we get more shares❣️

💫 For example, instead of investing $800 at one go to purchase 8 shares of a stock that costs $100 each, we spread out the same $800 over 20 trading sessions (4 weeks, Monday - Friday) spending a consistent $40 each day to purchase a fraction of the same stock.

🌟🌟🌟 The power of DCA is activated when we invest exactly the same amount of money in 1 stock at regular times, regardless of the stock price. Intuitively, this sounds illogical or perhaps even silly because this means that we’re buying when the share price is high, when everyone else is selling to profit-take😅 So how can DCA be good⁉️ Read on to find out❣️

🤔💭: How is Averaging Down different from DCA?

📝: Suppose we decided to invest $800 at one go to purchase 8 shares of a stock that costs $100 each but the next day, the price of the stock drops to $80! We would have immediately lost $160 (loss of $20 x 8 shares) so in order to reduce our overall cost/share, we invest another $400 to purchase 5 shares of the stock at $80. We have now invested $1,200 and bought a total of 13 shares at an average price of $92.30. This method is called Averaging Down🤓

One the other hand, if we had DCA $40 on both days, on the 1st day when the share price was $100, we would have bought 0.4 shares and on the next day when the share price is $80, we would have bought 0.5 shares. We have now invested $80 and bought 0.9 shares at an average price of $88.89. We spread out our stock purchases so that the average price per share for a stock is less affected by the stock’s volatility. This is the power of DCA😉

Now that we understand how DCA is different from Averaging Down, let’s do a comparison between these 3 purchase strategies:

1-Time Purchase 🆚 Averaging Down 🆚 DCA

💡Conclusion:

Dollar-Cost Averaging (DCA) is the practice of investing a consistent dollar amount in the same investment over a period of time. This period of time can be daily, weekly, or monthly. DCA is NOT the same as Averaging Down and can sometimes provide better investment outcomes as compared to a 1-Time Purchase or Averaging Down. DCA:

(1) Removes the emotional stress of having to decide our purchase price and/or dissatisfaction of getting a stock at an undesirable price💆🏻‍♀️💆🏻‍♂️

(2) Lessens the effects of entering the market at the wrong time❌⏰❌

(3) Allows a more passive approach of investing where investors don’t have to keep monitoring market conditions❌🔎🗞🗞🗞❌

(4) Is suitable for busy investors who don’t have time to monitor share prices closely❌🔎📈📉❌

(5) is suitable for both expert and novice investors🤗🥳

🐯Tiger Broker’s Auto-Invest Function allows us to harness the power of DCA❣️I have finally tried DCA myself via Auto-Invest and am excited to share my research & experience with you🤗 Do you still have doubts about DCA even with the table comparison I provided above🤔❓If so, keep a lookout for the rest of my Auto-Invest posts later today & tomorrow:

📌 Me🆚🐯-Real Life Example In Action🎬

📌 Does DCA-ing Daily/Weekly/Monthly Matter🕵🏻‍♀️🕵🏻‍♂️❓

📌 DCA Profit-Loss Analysis During A Bear Market💵/💸🐻

📌 Auto-Invest Toolkit🛠-Everything You Need To Know To Start Auto-Investing Today😉

Do follow me if you enjoy reading analytical stock research🔍 presented in a fun & easily understandable way😉 & for the Latest Stock & 🗞🗞🗞 Updates🕵🏻‍♀️❣️

Please help to click on the “Like” & “Share/Repost” buttons at the Bottom Right corner so that more 🐯🐯🐯 can access this information, many thanks🤗🥰 You will Greatly Encourage Me❣️

As usual-🤔💭 Consider POV & Actions of Investors + 👩🏻‍💻👨🏻‍💻 Research + 🗑FOMO & Greed = Investing Wisely 🤓🤗 + Accumulating Wealth 💵💰

$Nasdaq100 Bull 3X ETF(TQQQ)$ Bullish$Alphabet(GOOGL)$ Bearish$Bank of America(BAC)$ Bullish$First Republic Bank(FRC)$ Bullish$UBS Group AG(UBS)$ Bullish

@TigerStars @CaptainTiger @MillionaireTiger