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Dollarcost averaging works from "summary" of A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Twelfth Edition) by Burton G. Malkiel
"Dollar-cost averaging" is a strategy that involves investing a fixed dollar amount in a particular investment at regular intervals, regardless of what the price of the investment is at that time. The idea behind dollar-cost averaging is simple: by investing a fixed amount consistently over time, you end up buying more shares when prices are low and fewer shares when prices are high. This strategy helps to smooth out the effects of market volatility and can reduce the overall cost of investing in the long run. Dollar-cost averaging works because it takes advantage of the natural fluctuations in the market. When prices are low, your fixed investment buys more shares, allowing you to benefit from future price increases. Conversely, when prices are high, your fixed investment buys fewer shares, protecti...
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