Instead of trying to time the market, you invest on a schedule.
Direct answer
Dollar-cost averaging means investing a fixed amount at regular intervals, such as monthly. When prices are low, your money buys more units. When they are high, it buys fewer. It helps you build a habit and avoid worrying about timing, but it does not guarantee profits or prevent losses.
Example
You invest 100 a month. In month one the price per unit is 10, so you get 10 units. In month two it is 5, so you get 20 units. In month three it is 10, so you get 10. You paid 300 for 40 units, an average of 7.50 per unit.
Pros and cons
Pros: builds discipline, reduces timing stress, fits monthly pay. Cons: you may do worse than a lump sum in rising markets, and fees can add up on small purchases.
Tips
- Automate the investment.
- Keep costs low.
- Keep going when markets fall.
Where Teyro fits
Teyro's Money Habits That Build Long-Term Wealth course turns this into short lessons you can play in a few minutes a day. It has 50 lessons, and you can start free.
The bottom line
A simple routine beats guessing. This is general education, not a recommendation of any investment.
This is general education, not personal financial advice.
