Dollar Cost Averaging:

Question

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Dollar Cost Averaging is a strategy where an investor regularly invests a fixed amount of money in a stock, regardless of its current price. This means that an investor will buy more shares when the price is low and fewer shares when the price is high. Over the long run, this practice can reduce the impact of market fluctuations on an investor's portfolio and potentially lead to better returns. However, it does not guarantee a profit or prevent a loss on the stock sale. This strategy is not suitable for day traders as it is a long-term investment approach.