WEBVTT

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People often believe

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that it's safer to invest your money
in a rising market

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instead of a fluctuating market.

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However, that may not always be the case.

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The power of dollar cost averaging

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encourages you to buy
more investment shares

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when the market share price is low

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and fewer shares when the price is high.

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This can result in paying

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a lower average cost per share over time.

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In this example, investor A and investor B

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both invested $600 into the market

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in $100 monthly increments.

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Investor A purchased all of his shares

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as the market consistently soared.

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Right after Investor B
started buying his shares, however,

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the market fell and then recovered

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to where it was at the start
of the investment period.

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By taking advantage
of the fluctuating market

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to purchase shares at a lower price,

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investor B was able to buy more shares

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than investor A did in a rising market.

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After six months, investor A's
total $600.00 investment

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yielded approximately 42 shares

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at an average price of $14.19 per share.

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Those 42 shares got multiplied
by the $20 share price

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and the return on the total investment
grew to more than $845.

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Investor B's investment
resulted in 126 shares,

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three times as much as investor A

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at a low average price
of only $4.76 per share.

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When those shares got multiplied
by the $10 share price,

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investor B's total return on investment

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was more than $1,259.

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That's the power of dollar cost averaging.