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Andrea has $500 in the bank that she wants to invest in the stock market. She also wants to add $35 per month into this account from her part-time job. Which is the best way for andrea to build up a diversified portfolio of stocks?

Respuesta :

Put in dollar cost averaging. That means  averaging is an investment strategy with the goal of reducing the impact of volatility on large purchases of financial assets such as equities.

Andrea may build up a diversified portfolio of stocks by putting her money into dollar-cost averaging.

What is dollar-cost averaging?

Dollar-cost averaging is an investment strategy in which the individual periodically purchases target assets or invests in a certain portion of funds in one security.

Therefore, it would reduce the risk tolerance associated with purchasing large stock securities.

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