Dollar-Cost Averaging
Dollar-cost averaging means investing a fixed amount at regular intervals regardless of market prices.
1 min read Learning to Invest
What it means
Dollar-cost averaging means investing a fixed amount at regular intervals regardless of market prices. You'll naturally buy more units when prices are lower and fewer when they're higher.
Example
You invest £200 into a global fund every month through a direct debit.
Why it matters
It removes much of the pressure to decide when to invest.
It can reduce timing risk but doesn't guarantee positive returns.
Is it better than investing a lump sum?
Not always. Lump sum investing has historically outperformed on average, but dollar-cost averaging can be easier emotionally.