Dollar-Cost Averaging
Investing a fixed amount on a fixed schedule — every paycheck, every month — regardless of what the market is doing. You automatically buy more shares when prices are low.
By Findley's Finance · Last reviewed: September 2026
Why it matters
Dollar-cost averaging works because it removes the only part of investing most people get wrong: timing. Automated contributions turn market drops from scary events into discounts — your $500 buys more shares on sale. It will not beat a lump sum in a steadily rising market, but for money earned over time, like paycheck contributions, it is the practical default.
Concrete example
$500 a month into an index fund buys fewer shares at market highs and more shares during dips — no decisions required.