Dollar-cost averaging means investing the same amount on a regular schedule, no matter what the market is doing.
Key takeaways
- You buy more shares when prices are low and fewer when they are high, without having to guess the right moment.
- It turns investing into a habit.
- If you already have a large sum, investing it all at once has historically done slightly better on average.
The benefit
You buy more shares when prices are low and fewer when they are high, without having to guess the right moment.
The real benefit
It turns investing into a habit. Automatic monthly investing removes the temptation to wait for the perfect time, which never comes.
When a lump sum is better
If you already have a large sum, investing it all at once has historically done slightly better on average. The regular approach is easier on the nerves.
