Buying the same amount at regular intervals
Dollar-cost averaging means investing a fixed sum on a fixed schedule. You buy fewer shares when prices are high and more when they are low, which smooths your average cost. It reduces the risk of putting everything in at a peak, but it does not stop prices from falling.
Invest $30,000 monthly at $1,500, $1,000, and $1,200 and you buy 20, 30, and 25 shares — 75 shares for $90,000, an average of $1,200 against the simple price average of $1,233.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.