NEW YORK (MarketWatch) — A mutual fund giant challenges an investment technique financial advisers have used for decades, and many professionals are taken aback.
But people with a lump sum of money to invest have good reason to question the conventional wisdom behind dollar-cost averaging.
This suggestion counters the status quo — dollar-cost averaging is just one of those things that’s always been done a certain way. Walk into a broker’s office with an inheritance or a big chunk of your life savings, and chances are you’ll be told there’s no reason to put it into the stock market all at once. Better to average into the market with your dollars, committing a little at a time on a regular schedule. That way there’s less to worry about if stocks get hammered the day after you buy.
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