I Got this information from one of the brokers that I deal with in the stock market and I think most of us can related to this .. one way or another

Dollar-based investing means buying stocks or other investments in a dollar amount you choose, instead of in multiples of the stock price. Let’s say you decide to invest $50 or $200 a month; your investment doesn’t normally buy an exact whole number of shares. It’s a great idea for the ordinary investor who wants to put away consistent amounts for the long term.

In the real world — Suppose you decide to save $50 a month, every month, and you want to put those savings directly into the stock market. Global Widget is a solid company, with good management and a great record of consistent growth — it looks like an excellent long-term investment. But… The problem’s obvious. You can’t buy into it at all, because (at a current price of $126.99 per share) even a single share will set you back more than double your monthly saving. Sure, you could save up for ten weeks, and then buy one share. But that’s not a practical idea. First, you’ll have to keep the money somewhere as you save it, and it won’t be growing much either under the mattress or in your checking account.

A dollar based share account is designed to let you do just that… and more. If you set your account to buy only one stock — Global Widget — your monthly $50 (or whatever) buys just that company. If you also want to invest in MiracleDrug, PrettyNiceCompany, and BigBank, then the money is automatically split between the four stocks. Maybe this month your $50 will buy a tenth of a share in Global Widget, three eighths of a share in MiracleDrug, and five sixty-fourths of a share each in PrettyNiceCompany and BigBank. The details don’t matter, what matters is that you were able to invest the dollar amount that you chose, on a regular schedule, in the companies you believe in .

dollar cost averaging is another area related to dollar based investing ….All investing involves risks, and investing in the stock market may seem especially risky because stocks can exhibit great volatility. Even professional brokers and analysts find timing the market extremely difficult — and these are people with advanced financial degrees, whose full-time job is to keep tabs on the market.

So it turns out that a far wiser strategy, for the majority of investors, may be to treat investing in the stock market exactly like a savings account — or a piggy bank. You decide on an amount (let’s say $200) that you can afford to deposit every week or month. You add that much to your investment at the predetermined interval, regardless of the current price of the stocks.

The result is dollar-cost averaging. If a stock rises and falls, you’ll sometimes be “buying high” and sometimes “buying low,” relative to a stock’s long-term performance. But it also means that you keep adding to your portfolio in a consistent manner. You don’t focus on crests and troughs. You avoid both the temptation to play the market and the risks involved in getting it wrong.
Getting the best out of the stock market doesn’t just mean choosing good stocks. You also need to ensure that, on average, your money does as well as those investments do. Hence dollar-cost averaging A.KA choosing an amount to invest, investing that amount regularly, and not overreacting to the day-to-day stock price is a big step in a sensible direction.
The stock market comes with absolutely no guarantees. It’s reasonable to expect that investing in solid, “blue-chip” companies expose you to less risk than investing in an untried start-up that may (or may not) be the next decade’s Microsoft. As we have seen, even the established Microsofts of the world are not immune to a chill financial wind.

Dollar-cost averaging is a technical term only economists could love, but it conceals a very simple, very good idea. There’s relatively strong historical evidence that good-quality stocks are a rising tide in the long run. On the other hand, big waves can blow up out of nowhere — and about the worst thing you can do in a heavy sea is try your hand at surfing the crests.

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*Past performance is not a guarantee of future returns.