Everyone knows the secret to making money: buying low and selling high. The same applies in the stock market, but how do you get the best (lowest) price for stocks?

Dollar Cost Averaging: Designed to reduce risk, dollar cost averaging is a strategy where you buy smaller blocks of the same stock (versus large lump sum purchases) over time to reach the investment position you want. This often “smoothes out” the cost factor of these securities to help you manage the vagaries of market price changes – both up and down. Dollar Cost Averaging also takes out the risk of buying and removes the anxiety over when is the “best time” to buy.

Don’t forget that you can dollar cost average sell, just like we taught you to dollar cost average when you are buying. When you’re not sure about a stock or stocks in your portfolio, don’t hesitate to sell 1/3 or ½ to start reducing your position over time. By spreading out your sales of a group of securities, you often “even out” the market price changes with dollar cost averaging to generate a more risk-free and stable return.