 TITLE: What Is Dollar Cost Averaging? CONTENT: How Does Dollar Cost Averaging Work?\n------------------------------------\nTo see dollar cost averaging at work, let's imagine you have $1,000 you want to invest in a certain stock. For this example, let's say the stock you're buying is called CRDIT.\n**Scenario 1 (Lump sum investment)**: In this scenario, you take your $1,000 and invest it all at once, buying 20 shares of CRDIT at $50 each. As long as you hold this stock, your purchase price for these shares will be $50. If the cost of a CRDIT share goes up to $51, your position will increase by $20. If CRDIT goes down to $48, your total position will decrease by $40.\n**Scenario 2 (Dollar cost averaging)**: In this example of dollar cost averaging, you take your $1,000 and split it into 10 portions of $100 that you plan to invest once a week. Each week at the same time, you buy $100 worth of CRDIT at whatever the price is that day. END