Investing term
What is Dollar-cost averaging?
Investing a fixed amount on a fixed schedule, regardless of market level.
Dollar-cost averaging is investing a fixed amount on a fixed schedule, regardless of whether prices are high or low. It removes the impossible task of timing the market and smooths your average purchase price — you automatically buy more shares when prices are low and fewer when they're high. Its biggest benefit is behavioral: it keeps you investing through the scary stretches.
For example
Putting $300 in every month means in a market dip your $300 buys more shares — the plan quietly turns volatility into an advantage.
Dollar-cost averaging is taught hands-on in Stage 2 — Why Investing Matters (And When It Doesn't).
See the lesson →