Is it better to spread your investment over a set period or go all in at once? Focus Partners’ Kevin Grogan shares perspectives on dollar-cost averaging.

Dollar-cost averaging means spreading your investment over a set schedule or time period, rather than putting all your money in at once. While it might feel safer to ease in gradually, research shows it’s usually better to invest the full amount upfront. That’s because, on average, stock and bond markets tend to outperform cash. By using dollar-cost averaging, you’re delaying the chance to benefit from those higher returns—and taking on the associated risks—until later. However, if seeing the market go down will cause you to lose sleep, then dollar-cost averaging may provide greater peace of mind. We encourage you to speak with your advisor to determine if this investment strategy is right for you.

Source: Financial Planning Association.

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