In personal finance, what investing strategy divides purchases into equal amounts made at regular time intervals?

In personal finance, the investing strategy of making equal purchases at regular time intervals is dollar-cost averaging.

Under dollar-cost averaging, an investor commits a fixed amount on a schedule, such as monthly contributions to a retirement account. When prices are higher, the fixed amount buys fewer shares; when prices are lower, it buys more shares. The strategy therefore changes the average purchase price over time, but it does not guarantee a profit.

Regular payroll contributions to workplace retirement plans can resemble dollar-cost averaging when the same amount is invested each pay period. The approach can reduce the need to decide when to invest each contribution, but it may produce different results from investing a large available sum immediately.

Dollar-cost averaging is not the same as market timing. Market timing attempts to predict price movements and choose entry or exit points, while dollar-cost averaging follows a predetermined schedule regardless of short-term market conditions.