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.