The investment strategy in which a set dollar amount is invested regularly is called dollar-cost averaging.

Quick Scoop

What is this strategy?

  • Dollar-cost averaging is when you invest the same dollar amount at fixed intervals (for example, every week or every month), no matter what the market is doing.
  • Because the amount is fixed, you automatically buy more shares when prices are low and fewer shares when prices are high.

In plain terms: you keep feeding your investment on a schedule, instead of trying to guess the “perfect” day to buy.

Why people use dollar-cost averaging

  • It helps reduce the impact of short‑term market ups and downs on your average purchase price.
  • It removes some emotional decision‑making, because you invest on a schedule instead of reacting to headlines or fear.
  • Many retirement plans (like 401(k)s) and recurring investment plans are real‑life examples of dollar-cost averaging—money goes in every paycheck or every month automatically.

Simple example

  1. You decide to invest 100 dollars on the first of every month.
  2. Month 1: Price is 10 dollars, you buy 10 shares.
  3. Month 2: Price drops to 5 dollars, you buy 20 shares.
  4. Month 3: Price rises to 20 dollars, you buy 5 shares.

Over time, this fixed‑amount rhythm can lower your average cost per share compared with putting all your money in at a single moment.

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Meta description suggestion (under ~155 characters):

Learn what dollar-cost averaging is, the investment strategy where you invest a set dollar amount regularly to reduce risk and build wealth over time.

TL;DR: The strategy is dollar-cost averaging —investing a fixed dollar amount at regular intervals, regardless of price.

Information gathered from public forums or data available on the internet and portrayed here.