Dollar cost averaging is the practice of systematically investing equal amounts of money at regular intervals, regardless of the price of the security.
Dollar cost averaging can reduce the overall impact of price volatility and reduce the average cost per share.
By buying regularly in rising and falling markets, investors buy more shares at lower prices and fewer shares at higher prices.
Dollar cost averaging aims to prevent an untimely one-time investment at a potentially higher price.
Both novice and longtime investors can benefit from dollar cost averaging.