• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Financial Literacy Investment Tips

When stocks are crashing, use “DCA”

Ajibola Akamo by Ajibola Akamo
June 30, 2022
in Investment Tips
6 things to look out for when investing in cryptocurrency in Nigeria
Share on FacebookShare on TwitterShare on Linkedin

Riskier assets such as the equities and cryptocurrencies are down over 50% Year-to-Date as a result of a more aggressive stance by central bankers to increase contractionary monetary policies to curb the ever-increasing and worrying inflation rate.

As of the moment, major markets are now known for their fierce volatility and downside as more than $7 trillion have so far been wiped out from the stock markets this year. Coupled with the cryptocurrency market, this number increases to approximately $9 trillion.

With the current market circle, now more than ever, investors are wondering what the best approach to investing in these troubling times is. Unfortunately, however, unless you are a fortune-teller, no one can really time the bottom of a bear market. We can however take advantage of the current market condition and apply the Dollar-Cost Averaging (DCA) investment strategy.

RelatedStories

6 things to look out for when investing in cryptocurrency in Nigeria

Dollar cost averaging: Timing the market vs time in the market

February 12, 2022
Stock Market

Stocks crash: Portfolio strategies to adopt in a bear market 

January 28, 2022

Dollar-Cost Averaging

Dollar-cost averaging (DCA) is an investing strategy where an investor invests a total sum of money in small increments over a period of time as opposed to investing all at once. DCA is designed to help offset any negative effect on an investment caused by short-term market volatility. For instance, if the price of an asset drops during the time you are dollar-cost averaging, then you stand to make a profit if the price moves back up.

DCA is the best approach for individuals who are not professional investors. It can save an investor a lot of effort trying to time the market in other to get the best prices. It is a tool for investing slowly and consistently and it aims to protect against the human tendency to want to gain all at once.

How it works

Applying dollar-cost averaging is very simple and you do not necessarily have to invest in dollars. The approach works well with any other currency. You first have to determine the total amount of money and the assets you wish to invest in. Then, instead of investing the money all at once, you invest it in small equal instalments over a specific length of time.

  • Committing to this approach means, at times, you’ll be investing when the market or a particular asset has dropped in value. It also means there will be times when you’re buying during a market sell-off.
  • Some risk-averse investors might not be encouraged to purchase securities during bear markets, but viewed from another perspective, buying bear markets allows you to invest in potentially profitable assets at significantly cheaper rates especially when they are below their intrinsic value.
  • By buying when others might sell, dollar-cost averaging can potentially help you to reap the benefits of buying low and selling high.

With every golden strategy, there are downsides

  • The most notable downside of DCA is the possibility that you might miss out on a large gain you could have earned if you had invested all your money at once when the market was down.
  • That being said, we must remember that big profits require timing the market correctly which even not all professional investors can do. DCA is still a potentially safer way to take advantage of big market dips.
  • Another downside will be increased transaction charges. Because of the transaction charges charged by many trading platforms, you’re going to incur more trading costs with a dollar-cost averaging strategy.
  • A DCA strategy, over time, usually includes buying assets at any stage, whether it be stable, depreciating, or appreciating. If done consistently, a DCA strategy tends to lower your risk and does better over a long-time horizon.

Follow us for Breaking News and Market Intelligence.
Tags: dollar-cost averaging
Ajibola Akamo

Ajibola Akamo

Ajibola Akamo is an Investment Analyst, Financial Analyst, Economist and Accountant. You may contact him via his email ajibolaakamo@yahoo.com

Related Posts

6 things to look out for when investing in cryptocurrency in Nigeria
Exclusives

Dollar cost averaging: Timing the market vs time in the market

February 12, 2022
Stock Market
Exclusives

Stocks crash: Portfolio strategies to adopt in a bear market 

January 28, 2022
falling market
Financial Literacy

How to profit from a falling market with dollar-cost averaging

August 8, 2019
Next Post
Nigeria, South Africa, Kenya face the highest online threats in Africa—Report

Nigeria's central bank mandates Other Financial Institutions to fully comply with cybersecurity guidelines

Comments 1

  1. Attah paul says:
    June 30, 2022 at 6:32 pm

    I need trending on it

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank








DUNS

Recent News

  • FG treats 30 million Nigerians with ivermectin in major push against tropical diseases 
  • World Bank disburses N3.8 billion to boost climate adaptation in Yobe communities 
  • NCC vs MTN: AGF to decide on criminal charges facing CEO Karl Toriola 

Follow us on social media:

Recent News

FG treats 30 million Nigerians with ivermectin in major push against tropical diseases 

FG treats 30 million Nigerians with ivermectin in major push against tropical diseases 

July 2, 2025
World Bank disburses N3.8 billion to boost climate adaptation in Yobe communities 

World Bank disburses N3.8 billion to boost climate adaptation in Yobe communities 

July 2, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics