Which means, taking say $100 out of each paycheck and investing all of it on that day. You're not timing the market then, the money wasn't available prior to that. You're not paying attention to the price, you're just getting the price on that day.
This is what dollar cost averaging usually means... assuming prior money was already invested.
But when you have a lump sum, instead of putting it all in on that exact day you can DCA over a short period of time, like 2-5 days or 3 weeks. This is basically averaging over that period which is better than the chance of just happening to pick the wrong day to buy.
This is what dollar cost averaging usually means... assuming prior money was already invested.
But when you have a lump sum, instead of putting it all in on that exact day you can DCA over a short period of time, like 2-5 days or 3 weeks. This is basically averaging over that period which is better than the chance of just happening to pick the wrong day to buy.