By investing a fixed amount of dollars, as opposed to buying a fixed amount of metal at regular intervals, your average cost will be lower than the average price per ounce. X Steady investors reduce the effect of market risk by acquiring more gold at lower prices. X The average cost of the ounces of gold purchased by steady investors will always be lower than the average price per ounce. When the market is stuck in a trading range, dollar cost averaging tends to smoothe out the ups and downs. Although both steady and sporadic investors benefit in this type of market, market timers may completely miss out on such an opportunity if their timing is wrong.
Most people are unable to predict the beginning of an upswing.
Dollar cost averagers are able to participate in rising markets on a regular basis. That is better than sitting on the sidelines waiting for the right time to jump in. The success of dollar cost averaging depends on the discipline of patiently building up your stake. The fixed amount buys more metal when the price is down and less metal when the price is up. Of course, dollar cost averaging does not assure a profit or protect against a loss in declining markets.