The first is dollar-cost averaging or DCA. These are actually investment tricks where investors could divide their invested amount across periodic purchases. This effort could help investors reduce the impact of volatility in mostly overall purchase. Dollar-cost averaging strategy allows investors to make and manage purchases of equities at the best prices. In addition, DCA actually has another name, it is the constant dollar plan. Therefore, investors should have a plan about where and when they must invest.
In other words, regardless of price, this practice invests in equal amounts over the regular intervals. Basically, the goal of dollar-cost averaging is to shield the investors from the overall impact of volatility. This is important to protect target asset prices. The reason is because the price varies each time during investments.
The second is calibrate risk. Calibrate risk is the best solution for this condition: basically no amount of dollar-cost averaging can get around the fact that workers with higher balance could survive the bear market more. Meanwhile, older plan participants do not have time to fix the loss before retirement. So, there is actually a big gap between the groups. It means that investors must have a retirement approach to a bear market more than a younger worker with smaller account balance.
