Despite economic uncertainty, it’s a ‘great moment’ for dollar-cost averaging, says Betterment CEO

Despite economic uncertainty, it’s a ‘great moment’ for dollar-cost averaging, says Betterment CEO

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Investors are bracing for 2023 amid stock market volatility, rising interest rates and geopolitical risk — with many carrying recession fears into the new year.  

But despite economic uncertainty, financial experts point to timely opportunities, urging investors to put cash into the market, rather than leaving it on the sidelines.

Agreeing with many in the advisor community, Betterment CEO Sarah Levy said she expects a “turbulent and volatile first half of 2023,” but her long-term outlook is optimistic.  

“Over a five- and 10-year horizon, this is a great moment for that dollar-cost averaging opportunity,” she said, speaking at CNBC’s Financial Advisor Summit on Tuesday.

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The strategy behind dollar-cost averaging is putting your money to work by investing at set intervals over time, regardless of what happens in the market. 

While research shows investing a lump sum sooner may offer higher returns, some experts say dollar-cost averaging may help prevent emotional investment decisions.

After double-digit losses in 2022 for both the stock and bond markets, it’s easy to see why some may be hesitant to continue investing. But experts say the fear of loss can be costly, and you may miss the market’s best recovery days.

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“Take control of the things you can control,” Levy said, noting that automated, recurring investments can help “take the emotion out of the equation,” when the markets dip, she said.

There are opportunities for cash as interest rates rise

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