One advantage to dollar-cost averaging which I love so much is that, by investing mechanically, you will be able to completely take out the emotional component of your decision-making. You will continue on a preset course of buying a certain and specific dollar amount of your preferred investment irrespective of how the price swings wildly. This way, you will certainly not bail out of your investment when the price goes down in a sudden wild swing, but you’d rather see it as an opportunity to acquire more shares at a lower cost.

Moreover the honest truth is, if you are an investor looking for a profit oriented strategy that cuts your investment risk, you might want to consider this strategy. Of course, while this strategy completely helps you better in managing your risk, you are also less likely to experience outsized returns which is one of the most credible reasons why I still stick with this strategy.

The process of dollar-cost averaging actually refers to the practice of investing a consistent dollar amount in the same investment over a period of time.