# Dollar-Cost Averaging

Dollar-cost averaging (DCA) is investing a fixed amount at regular intervals regardless of market conditions. You automatically buy more shares when prices are low and fewer when prices are high.

## Why it matters

DCA removes the emotional paralysis of trying to time the market. Research shows that even investing at market peaks with DCA produces solid long-term returns, because the consistency matters more than the timing. It turns investing from a stressful decision into an automated habit.

Example

Investing $500/month into an S&P 500 index fund for 10 years totals $60,000 in contributions but could grow to ~$86,000 at a 7% average annual return.

## How Ray helps

Ray tracks your recurring investment contributions and can show the pattern over time. Ask to see if you're sticking to your DCA schedule.

Terminal

`$ ray "how consistent have my investment contributions been?"`

## Related terms

[Compound Interest](/content/learn/compound-interest/index.html)  
Compound interest is interest earned on both your original principal and on previously accumulated interest.  
[Index Fund](/content/learn/index-fund/index.html)  
An index fund is a type of mutual fund or ETF designed to track the performance of a specific market index, like the S&P 500.  
[Bear Market](/content/learn/bear-market/index.html)  
A bear market is a sustained decline of 20% or more in a broad market index from its recent peak.  
[Portfolio](/content/learn/portfolio/index.html)  
A portfolio is the complete collection of your financial investments — stocks, bonds, mutual funds, ETFs, real estate, and other assets.  
[Savings Rate](/content/learn/savings-rate/index.html)  
Your savings rate is the percentage of your income that you save or invest rather than spend.