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Glossary · Pro tools

Investing every month

Putting the same amount in at regular intervals, whatever the price.

Why it matters

You buy more shares when the price is low and fewer when it is high, and you never have to pick the perfect day. It is how most people invest from a paycheck.

How to read it

Investing a lump sum at once has beaten monthly investing about two thirds of the time historically, because markets usually rise. Monthly investing wins on comfort and when prices fall early.

Also called: DCA, dollar cost averaging

Related

BacktestTesting a trading rule on past prices to see how it would have done.Yearly return (CAGR)The steady yearly growth rate that would turn the starting amount into the ending amount.

In the Cluenex app, this explanation opens next to every investing every month figure, with the live reading for the stock you are looking at. Open it in Cluenex