Dollar cost averaging is a way to help reduce the risk of timing the market. It entails regularly buying a fixed dollar amount of an investment. For example, if you want to invest $100 in one fund, you could invest it all now. However, you would be taking a risk that the investment, or the market as a whole, might drop in value over the coming months. With dollar cost averaging, you might invest $10 in the same fund each month, for the next 10 months.
What is dollar cost averaging?
Did you find it helpful?Send feedback
Sorry we couldn't be helpful. Help us improve this article with your feedback.