Which is not an advantage of dollar-cost averaging?
A)It reduces the average share cost.
B)It avoids the risks of investment timing.
C)It minimizes taxes.
D)It requires investor discipline.

Question

Quizplus · Accepted Answer

Dollar-cost averaging alone does not minimize taxes. While it can potentially reduce taxes by avoiding a large capital gains tax bill from selling all shares at once, taxes will still be incurred on any gains realized from the sale of shares. Tax minimization strategies typically involve utilizing tax-advantaged accounts, tax-loss harvesting, and other techniques beyond just dollar-cost averaging.

Which Is Not an Advantage of Dollar-Cost Averaging