Dollar cost averaging program

We work with individual investors just like you every day. And over the years, experience has taught us that time in the market — not timing the market — is a solid strategy for success. Dollar cost averaging can help you build your portfolio over time and potentially smooth out the bumps along the way.

What is dollar cost averaging?

Dollar cost averaging is a strategy in which you make regular, fixed investments regardless of the cost of the asset. By investing on a set schedule, you develop discipline that can help you be a better long-term investor. Plus, investing systematically lets you buy more shares when the price is low and fewer when the price is high. Think of it this way: It helps "average out" your share price over time.

Pros of dollar cost averaging

Some potential benefits of dollar cost averaging can include:

• Reduced timing risk as investments are made regularly
• Lower volatility risk with short-term price changes
• Easy accessibility to new or inexperienced investors

Cons of dollar cost averaging

Potential drawbacks of dollar cost averaging can include:

• Missing out on growth investments that aren't part of your strategy
• Short-term underperformance, though long-term investing can help negate this
• Potential to perform worse than the broader markets

If you have concerns about your investment strategy, consider contacting a financial advisor to start developing an investment strategy that works for you.

The four C's of dollar cost averaging

• Convenience – Once you've decided on a fixed dollar amount to invest systemically, you take procrastination out of the situation. It's built-in discipline to help you cross several savings goals off your to-do list each month.
• Consistency – Every month, regardless of market movements, you are accumulating shares continuously and consistently.
• Choice – You can systematically invest in mutual funds, exchange-traded funds (ETFs), annuities and even individual stocks.
• Control – Dollar cost averaging lets you focus on what you can control — investing a set amount on a regular basis — rather than what you can't: the ups and downs of the market.

Dollar cost averaging example

Imagine you have $6,000 you want to invest in a specific stock, which is currently valued at $10 per share. You could purchase 600 shares upfront. Or, you could purchase $1,000's worth of shares once a month for the next six months. Now, imagine the following price action over a six-month period with $1,000 invested each month:

• Month 1: $10 per share, 100 shares purchased
• Month 2: $12 per share, 83.33 shares purchased
• Month 3: $8 per share, 125 shares purchased
• Month 4: $11 per share, 90 shares purchased
• Month 5: $9 per share, 111.11 shares purchased
• Month 6: $10 per share, 100 shares purchased

In this scenario, you would own 609.44 shares of the stock after six months, compared to 600 shares if you had invested all $6,000 upfront.

How to get started with dollar cost averaging

• Call your local Edward Jones financial advisor to learn more about how the program works. When you're ready, just give written authorization to enroll.
• You can change or stop the program at any time with just a phone call.
• We do all the record-keeping for you.
• Take advantage of our convenient and complimentary automatic money transfer from a checking, savings or money market account, so you have one less thing to worry about.