Dollar Cost Averaging Animation

Written and accurate as at: 13 April 2015

Many of us already have a dollar cost averaging strategy in place without even realising it. Every time our employers pay superannuation guarantee contributions (SGC) directly  into our superannuation funds and they are invested – we’re utilising dollar cost averaging.

A dollar cost averaging strategy can also work in reverse, when you take money out of a pension fund or investment on a regular basis, rather than as a lump sum.

Dollar-cost averaging takes the emotion out of investing because no matter what direction the market is going, you continue to invest. Investing regularly in a share or fund that continues to fall each and every month is not a wise move.