Dollar-cost averaging (DCA)

Example

Say you invest $300 in an ETF every month and the price goes $30, then $20, then $25: you buy 10, 15 and 12 shares. That is 37 shares for $900, an average cost of about $24.32, below the $25 average of the three prices, because the cheapest month bought the most shares. If the price then slips back to $20, those 37 shares are worth $740, so DCA does not prevent losses.

Hypothetical numbers, for illustration only.