Dividends4Life: Benefits Of Dollar Cost Averaging Into Dividend Stocks

When the benefits of dollar cost averaging are typically discussed, the focus is generally upon the fact that you are putting yourself in a position to achieve returns that mirror the long-term performance of the index funds or specific stocks that you choose to own. The obvious beneficial thing about dollar cost averaging is that you eliminate the risk of buying at market highs (the hindsight results of making a lump sum investment in 1999, 2000, 2007, etc. could be obnoxious), and you also increase the likelihood that you will continue to buy at market lows.

Scott Burns, a personal finance writer with a particularly strong talent to word things well, once said that he tries to construct a financial system for himself in such a way that he can "escape from having a life that consists of a long series of unpleasant financial surprises." When you dollar cost average into dividend stocks, you are taking active steps to not only escape from a life of unpleasant financial surprises, but you are putting yourself in a situation to receive pleasant financial "surprises" because you are taking the active steps to become an owner in an excellent dividend growth firm.

Source: Seeking Alpha

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