What is dollar-cost averaging and how does it work?

Dollar-cost averaging is an investing technique whereby an investor breaks up their investment into smaller, more frequent tranches instead of making one large investment. The theory is that by buying small amounts over time, the investor will pay less per share when prices are high and more per share when prices are low, leading to an overall lower cost basis. There is no perfect time to invest, and market timing is difficult if not impossible to do consistently. By investing in small increments over time, dollar-cost averaging takes the guesswork out of trying to time the market. Dollar-cost averaging does not guarantee profits or protect against losses in a down market, but it can help reduce the volatility of your investment portfolio. Investing involves risk, including the possible loss of principal. Dollar-cost averaging does not ensure a profit or protect against a loss in a declining market. #dollarCost