← Glossary
Dollar-cost averaging
Investing a fixed amount on a fixed schedule, whatever the price.
Because the amount is fixed, it buys more shares when the price is low and fewer when it is high: $120 buys 12 shares at $10 and 20 at $6. It removes the need to choose a moment, and suits investing from a salary.
It does not guarantee a profit. When prices rise steadily, investing a lump sum at the start does better; when the investment falls and stays down, regular investing loses money too.