What is Dollar-Cost Averaging?

Dollar-cost averaging is an investing strategy where you invest a fixed amount of money on a regular schedule, regardless of whether the market is up or down. For example, an investor may choose to invest $1000 every month into an ETF or stock. When prices are high, the investor buys fewer shares. When prices are low, the investor buys more shares. This strategy can help reduce the impact of market volatility and removes the pressure of trying to perfectly time the market. Instead of worrying about buying at the exact right moment, investors focus on consistently investing over time. Many long-term investors use dollar-cost averaging because it encourages discipline and helps build wealth gradually. While it does not guarantee profits or protect against losses, it can be a simple and effective strategy for beginners.


FYI: This article is for educational purposes only and should not be considered financial advice. Always do your own research before making investment decisions. 

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