Manage risk is key while you plan for retirement
About Dollar Cost Averaging and Diversification
Diversifying your savings among several asset types may enable you to take advantage of growth potential in different sectors and various financial markets. You may want to avoid placing your retirement savings in one type of asset, so to balance performance in times of market fluctuation. Also consider dollar-cost averaging which is the process of making regular investments on an ongoing basis, regardless of price. This can make the average cost of your investments lower than the average market price over time. Although dollar-cost averaging may not mitigate market, inflation, and longevity risks, it typically offsets their impact on the value of your investments.
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Diversification and Dollar cost averaging do not assure a profit and does not protect against loss. Dollar cost averaging involves continuous investment regardless of fluctuating price levels of such securities. Investors should consider their financial ability to continue purchases through periods of low price levels.