Dollar-Cost Averaging
Investing a fixed amount at regular intervals regardless of price, smoothing out market swings.
Dollar-cost averaging means investing the same amount on a set schedule — for example every payday — no matter what the market is doing. It buys more shares when prices are low and fewer when high, removing the temptation to time the market.
Examples
- Automatically investing $500 on the first of every month is dollar-cost averaging.