Financecalendar_todayLast updated: Apr 2026
What is Dollar-Cost Averaging?
/ˈdɒlə kɔːst ˈævərɪdʒɪŋ/
A strategy where you invest a fixed amount of money at regular intervals (weekly, monthly, or yearly) regardless of whether prices are high or low. This removes the pressure of timing the market perfectly and reduces the impact of market volatility on your average purchase price.
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Everyday Example
Instead of trying to guess when to buy shares, you invest £100 every month for the next year—some months you'll buy at peak prices, other months at bargains, but over time you'll have paid an average price.
publicReal-World Application
“Most workplace pension schemes use dollar-cost averaging automatically by deducting fixed contributions from your salary each month, and Vanguard and other fund managers actively promote this as a beginner-friendly investment approach.”
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Did you know?
The strategy became popularized during the 1970s stock market volatility as a way for ordinary investors to avoid catastrophic timing mistakes, and gained renewed attention during the 2008 financial crisis.
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Key Insight
You don't need to be right about when to invest—consistency beats timing almost every time.
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