Dollar-cost averaging is a strategy where an investor consistently invests a fixed amount of money into the market, regardless of its performance. This method ensures that more shares are bought when prices are low and fewer shares when prices are high, thus averaging out the cost over time. Graham illustrates this with a historical example: 'If you had started with a paltry $100 and simply invested another $100 every single month, then by August 1939, your money would have grown to $15,571!' This approach mitigates the risk of market volatility and leads to substantial long-term gains. | Benjamin Graham | The Intelligent Investor

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Finance

The Power of Dollar-Cost Averaging

Dollar-cost averaging is a strategy where an investor consistently invests a fixed amount of money into the market, regardless of its performance. This method ensures that more shares are bought when prices are low and fewer shares when prices are high, thus averaging out the cost over time. Graham illustrates this with a historical example: 'If you had started with a paltry $100 and simply invested another $100 every single month, then by August 1939, your money would have grown to $15,571!' This approach mitigates the risk of market volatility and leads to substantial long-term gains.

-- Benjamin Graham