What are the advantages of dollar cost averaging?

Dollar cost averaging helps you enter the markets. It also might help you exit the markets and it also helps you get it at nice even price.

The difficulty with buying all at once is if the markets are bouncing around and you might buy all at once when the markets are high and then you get an average cost that would be way up here when in fact the markets are bouncing around down here.

So it just ensures that you're getting sort of the average cost. On the other hand, the markets are generally going up and if they are generally going up you might think it’s best to buy all in the front. That’s nevertheless, if you're getting a little bit of a time, it will smooth your returns over time.

So we recommend dollar cost averaging during your investment period when you're adding to your portfolio and then you do the same thing after you retire as you're gradually getting out. You sell a little bit each month.