Risk & Portfolio

Dollar-cost averaging

Investing set amounts at regular intervals regardless of price; it does not assure a profit or prevent loss.

Plain-English context

Why it matters

This concept helps describe how one position or behavior can affect the resilience of an entire portfolio.

EXAMPLE

A $10,000 position moving 10% changes by $1,000; dollar-cost averaging helps place that movement in the context of the wider portfolio.

COMMON MISTAKE

Assuming Dollar-cost averaging removes risk rather than describing or redistributing part of it.

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