skip to main content

Invest for Your Future—A Little at a Time

photo man holding his son and a piggy bank

If you’re routinely making contributions toward your retirement account (e.g., in UMPIP or Horizon), you are using dollar-cost averaging. You may never have heard of this investment strategy, but it is a way to reduce risk while you put money away for your future.

So why is dollar-cost averaging important, and how does it work?

No one—not even the most skilled financial experts—can accurately predict the short-term direction of U.S. and world stock markets. That means you cannot accurately determine the exact moment investments will lose money or the moment markets will improve.

All financial investment involves some level of risk. You might put money in the market and experience a downturn, such as the Great Recession of 2007-2009 or the dip caused by the Coronavirus earlier this year. However, while the market is down, investment shares will be purchased at a lower price, potentially positioning you for greater gains in the future.

History has shown numerous examples of what appeared to be “bad times” but proved to be the best times to invest. The strongest five-year return in the history of the U.S. stock market—367%—began in 1932, during the Great Depression, according to the 2020 SBBI® Yearbook. Returns of more than 200% were also seen in the five-year periods beginning in 1982 and 2009, following deep recessions.

With dollar-cost averaging, you simply invest a fixed amount of money in your investment funds at regular intervals (i.e., biweekly or monthly), ignoring investment price fluctuations. This strategy “smooths” your purchase price over time.

Dollar-cost averaging also has other benefits.

Investing can be stressful if you closely watch as the money in your account rises and falls. Market swings can, understandably, cause participants to worry about their retirement security. However, fluctuations in the value of investments are normal, which is why at Wespath, we invest for the long term.

On average, U.S. stocks can decline over 10% in any given year and 20% every 3 years. Wespath adheres to a consistent, long-term and disciplined strategy for managing a diversified investment program. Market corrections and downturns are built into Wespath’s long-term projections for account performance.

Dollar-cost averaging can take the emotion out of investing, saving you from decisions based on fear or greed. If you’re dollar-cost averaging, you end up continuing to buy when others are selling fearfully, taking advantage of opportunities and setting yourself up for long-term gains.

To learn more about Wespath’s investing philosophy, visit

For professional help managing your retirement account investments, contact EY Financial Planning Services at 1-800-360-2539 or visit

Hark! Newsletter

Read the latest Hark!