What Is An Example Of Dollar-Cost Averaging?

A good example of a dollar-cost averaging path is pretty much investing lets say $600 per month in an index fund that tracks the performance of a broad market index. And this might be something like S&P 500.

Keep in mind that there will be some months where the  index will be priced high price. Which means that less shares would be purchased for the $600 investment, which was mentioned above. And there will be some months where the index will be low. Which means that $600 would more or less buy a greater number of shares. In the long run.

Investors who for the most part use dollar-cost averaging strategy are betting that the simplicity of the strategy which is combined with the fact that it protects them from the temptation of buying high and selling low. And this will sooner or later lead to better results than trying to time the market on each purchase.

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