4. Dollar Cost Averaging
Automatic investments of the same amount of money at regular intervals is another great way to implement the dollar cost averaging strategy and in many ways simply replicate what your workplace super contributions are doing but with the added benefit of the money being accessible for personal goals house deposit holidays education expenses unlike super, which is locked away until retirement.
Since you’ll be less likely to make a purchase when prices are high and more likely to do so when they’re low, you’ll save money in the long run on the average cost of investing in various assets by adopting this technique. The most compelling argument for using dollar cost averaging is that it helps investors avoid the pitfalls of investing based on their emotions, such as greed or fear. This is especially important during times of market volatility when investors are more likely to succumb to the temptation to sell low and buy high or to become overexposed to certain asset classes during times of market prosperity.