For families investing in their children’s future, there’s one simple principle that has stood the test of time – consistency. One of the most powerful long-term investing strategies isn’t about predicting the next hot stock or timing the market. It’s about showing up regularly with what you can, when you can. This strategy is known as dollar cost averaging.
What is Dollar Cost Averaging?
Dollar cost averaging (DCA) is the practice of investing a fixed amount of money at regular intervals, regardless of market conditions. Whether the market is up or down, you stick to the schedule. Over time, this approach can reduce the emotional highs and lows of investing – and help you stay committed to your long-term goals.
Here’s how it works: Imagine you invest $50 every month into your child’s custodial account. When the market is high, your money buys fewer shares. When the market dips, your money buys more. Over time, this evens out your purchase price and helps avoid the common mistake of trying to “buy low, sell high” – something even professional investors struggle to do consistently.
Why It Works – Especially for Parents
DCA helps take the guesswork out of investing. For busy parents, that’s critical. Instead of worrying about whether “now” is the right time to invest, you’re building a habit of consistency. And when you start investing early in a child’s life, those steady contributions – even if they’re small – have years to grow.
UTMA custodial accounts through UNest are designed for this kind of long-term, consistent investing. They allow you to make monthly deposits toward your child’s future, whether that future includes college, launching a business, or putting a down payment on their first home.
Small Amounts. Big Impact.
You don’t need to start with a large lump sum. With DCA, the power lies in routine. A $25 monthly deposit over 18 years adds up – especially when invested. Family and friends can also contribute, helping to grow the account without disrupting your monthly budget.
Build Habits. Build Confidence.
One overlooked benefit of DCA is the opportunity to teach your child about money. As they grow older, you can involve them in reviewing the account, showing how their savings grow through regular deposits and market performance. It’s a tangible way to build lifelong financial literacy.
Start Building Today
At UNest, we believe that every family deserves the tools to build a strong financial future for their children. Dollar cost averaging is one of those tools – simple, proven, and effective.
Start small. Stay consistent. Open a UTMA account with UNest and set up monthly contributions today.
