Dollar Cost Average Definition
A system of buying securities at regular intervals with a fixed dollar amount.
Under this system investors buy by the dollars worth rather than by the number
of shares. If each investment is of the same number of dollars, payments buy
more shares when the price is low and fewer when it rises. Temporary downswings
in price benefit investors if they continue periodic purchases in both good
times and bad and the price at which the shares are sold is more than their
average cost.