This technique is designed to reduce market risk through by purchasing of stocks at given intervals and fixed amounts. Many investors already to this to use without realizing it. Others could save themselves a lot of money, effort and time by starting a plan. You will see how implement the three simple steps to beginning a dollar cost averaging plan, look at concrete examples of that can lower your cost basis, and see how it can reduce your risk.

Instead of investing in one lump sum, you work your way into a position by buying smaller amounts slowly over a longer period of time. The cost basis is spread out over several years, protecting yourself against changes in market price.

1. Decide how much money you can save each and every month.
2. Select an investment that you want to hold for the long term, preferably five to ten years or longer.
3. At regular intervals invest that money into the security you\�ve chosen.

Amount invested	Shares Purchased	Shares Closed At Two Years Later	Stocks Worth
Invest $15000 Jan 2000	264.46	$13.69	$3,620
$1,250 per quarter	746.21	$13.69	$10,216