Dollar-Cost Averaging
What is Dollar-Cost Averaging?
Investing a fixed amount at regular intervals, regardless of price.
Understanding Dollar-Cost Averaging
With dollar-cost averaging, you buy more shares when prices are low and fewer when they are high. It removes the pressure of trying to time the market.
Research suggests that investing a lump sum right away has historically beaten spreading it out more often than not, because markets tend to rise. Dollar-cost averaging's main benefit is behavioral: it builds a steady habit.