What defines dollar-cost averaging as an investment strategy?

Dollar-cost averaging is defined as consistently investing a fixed amount of money at regular intervals, regardless of market conditions. This strategy helps to mitigate the impact of volatility by allowing an investor to purchase more shares when prices are low and fewer shares when prices are high. Over time, this can lead to a lower average cost per share, which is particularly beneficial in fluctuating markets.

This approach is valuable because it removes the emotional component of investing and encourages disciplined saving and investing behavior. It can be advantageous for students and new investors who may not have the financial knowledge or experience to time the market effectively. By regularly contributing a set amount, they can build wealth over time without having to worry about short-term market fluctuations.