Mutual fund investing question?

Question

Is it better to dollar cost average once per quarter or once per month?

How do you dollar cost average? (I know how to do it I am just wondering how you do it personally so I can compare it to the way I do it)

How many funds do you have investments in?

What it your assett allocation and how old are you?

At what age do you plan to stop working?

Answer 1

The idea of dollar cost averaging is to invest through highs and lows, therefore reducing chances of buying at higher prices.  It is a proven fact that through this method, you are more likely to have a lower "average" price.

The period in which you invest funds is up to you, however keep in mind management fees (load) when investing.  If you are investing large amounts, less frequently can save you money.

Typically investment managers recommend no more than five funds, as that is usually the largest number one can manage effectively.

Asset allocation depends on when you need the money.  If it is near term, less volatile investments are preferred, if it is long term, more risky investments can be used, as you have more time to make up the money if you lose some of it.  I have provided a good link below for asset allocation.

You mention age when you stop working, so I am thinking you are talking about retirement funds.  Determine the number of years before retiring when setting your asset allocation.