How does dollar-cost averaging work?

Dollar-cost averaging involves investing a fixed amount of money at regular intervals, regardless of market conditions. This strategy buys more shares when prices are low and fewer when prices are high, aiming to average out the cost per share over time and potentially reduce the impact of market volatility on investments.

Dollar-cost averaging is an investment strategy where an investor consistently invests a fixed amount of money at regular intervals, regardless of the asset's price. This approach helps to reduce the impact of market volatility. When prices are high, the fixed investment buys fewer shares, and when prices are low, it buys more shares. Over time, this strategy aims to provide a more stable and potentially lower average cost per share, mitigating the risk of making poor investment decisions based on short-term market fluctuations.