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Investing & Markets · 7 min

Dollar-Cost Averaging

Investing a fixed amount on a fixed schedule, regardless of price.

Dollar-cost averaging means contributing the same amount at regular intervals. When prices fall you buy more units; when they rise you buy fewer.

Its real benefit is behavioural. A schedule removes the need to predict, which is the part most investors get wrong.

It does not protect against loss. It is a method of participation, not a guarantee.

Key takeaways

  • Fixed amount, fixed schedule.
  • Removes timing decisions from the process.
  • Offers no protection against declines.

Knowledge check

Dollar-cost averaging mainly helps with what?

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