Saturday, February 21, 2009

Dollar Cost Averaging.

Like most folks who have a 401k or equivalent, I have lost a lot of money of late. I don't even look at the statements anymore! But the one comfort I have is that I am buying stocks at bargain prices, and lots of them. This is the genius behind dollar cost averaging (DCA). You put the same dollar amount in the market every month, and at times like this, you get a lot of stock for your money.

My favorite blogger, Felix Salmon discusses the topic here. Felix also goes off on folks who criticize Suze Orman for her support of DCA. He's completely correct. While Suze Orman is a little annoying at times, she offers very sensible sound advice.

So, don't change your allocation - keep buying these bargain stocks. Oh and hope for brighter days!