Dollar-cost averaging (DCA) is an investment strategy where you invest a fixed dollar amount at regular intervals (such as weekly, monthly, or quarterly), regardless of the asset's price or market conditions. Instead of investing a lump sum all at once, you spread your investment over time. When prices are high, your fixed investment buys fewer shares; when prices are low, it buys more shares. This approach averages out your cost per share over time and helps reduce the impact of market volatility on your overall investment.

The strategy is particularly popular for retirement accounts like 401(k)s, where employees automatically invest a portion of each paycheck. Dollar-cost averaging removes the emotional stress of trying to "time the market" and eliminates the risk of investing all your money right before a market downturn. While it doesn't guarantee profits or protect against losses in declining markets, it provides a disciplined, systematic approach that can be especially beneficial for beginning investors or those who are risk-averse.