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Glossary Finance

Dollar-cost averaging

Dollar-cost averaging means investing a fixed amount at regular intervals regardless of the price, so you buy more shares when prices are low and fewer when high.

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In more detail

Investing $100 at prices of 10, 8 and 12 buys 30.833 shares at an average cost of $9.73, below the average price of $10. It does not guarantee a profit, but it removes the pressure of timing the market.

Try these tools

Dollar-Cost Averaging (DCA) Calculator

Project the future value of investing a fixed amount on a regular schedule.

See also

  • Glossary Mutual fund
    A mutual fund pools money from many investors to buy a diversified portfolio of shares, bonds or other assets run by a manager.
  • Glossary Return on investment (ROI)
    Return on investment (ROI) is the gain or loss on an investment as a percentage of what was invested.
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