Part 3/9:
With this method, an investor can smooth out the effects of market volatility. However, when applied to individual stocks, this strategy may present significant risks. Unlike well-diversified investments, single stocks can plummet for extended periods, as exemplified by the case of Voyager Digital, which saw its stock go to zero after a bankruptcy filing. This highlights the importance of employing dollar cost averaging with well-diversified funds, such as index funds or ETFs, rather than isolated stocks.