The Power of Dollar-Cost Averaging: Investing Without Timing the Market

What Is Dollar-Cost Averaging? Dollar-cost averaging (DCA) is an investment strategy where you invest a fixed amount of money at regular intervals, regardless of market conditions. Instead of trying to time the market and invest a lump sum at the perfect moment, you spread your investments over time. This approach is used by millions of investors and is built into most retirement plans like 401(k)s. How It Works Suppose you invest $500 per month in a broad stock market index fund. When prices are high, your $500 buys fewer shares. When prices are low, your $500 buys more shares. Over time,…