Dollar-Cost Averaging

By Entrepreneur Staff

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Dollar-Cost Averaging Definition:

To invest, as in shares of stock, fixed amounts of money at regular intervals so as to buy more at lower prices ad less at higher prices

Dollar-cost averaging means that if you put the same amount in each year, you'll buy more investments, such as shares of a mutual fund, when prices are down and fewer when prices are up. The end result will be that you'll pay a lower average price than the actual average price of the investment during that period.

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Individual Retirement Account (IRA)

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Dollar-Cost Averaging

To invest, as in shares of stock, fixed amounts of money at regular intervals so as to buy more at lower prices ad less at higher prices

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