The investment strategy of putting the same dollar amount into investments each period is known as?

The investment strategy of putting the same dollar amount into investments each period is referred to as Dollar Cost Averaging. This approach involves consistently investing a fixed sum, regardless of the price of the investment at the time. The primary advantage of this strategy is that it reduces the impact of volatility on the overall purchase. By investing a constant amount, an investor buys more shares when prices are low and fewer shares when prices are high, leading to an average cost per share that can potentially be lower than if the investor tried to time the market.

In Dollar Cost Averaging, the alignment of the investment amount to a predetermined schedule—whether it be monthly, quarterly, or another interval—allows for disciplined investing. This can help mitigate the emotional biases that often accompany investment decisions, such as the fear of market declines or the excitement of market rallies.

Understanding this strategy is particularly useful for investors who seek a more systematic approach to investing, as it can lead to accumulating wealth over time while minimizing market timing risk.