Investing a set amount of money on a regular schedule (say, $200 every month), no matter what the market is doing. Sometimes you buy when prices are high, sometimes when they’re low. Over time it balances out, and more importantly, you stop trying to guess the perfect moment to invest (which almost nobody can do consistently anyway).
Walk through the numbers
You invest $200 every month. When the price is $20 you get 10 shares, when it dips to $16 you get 12.5. Over time you automatically buy more when prices are low.
It removes the impossible job of timing the market and turns investing into a habit.
Related terms
For education only and not personalized investment advice. Examples are hypothetical illustrations, not a prediction or a promise of results. All investing involves risk, including the possible loss of principal.