What is the strategy of buying at regular intervals during both high and low market points called?

• A. Market timing
• B. Dollar cost averaging
• C. Value investing
• D. Cumulative investment strategy

Answer: (B)

The strategy of buying at regular intervals during both high and low market points is called dollar cost averaging. This investment approach helps mitigate the impact of volatility in the stock market by spreading out the investment over time, regardless of market conditions. By consistently investing a fixed amount at regular intervals, investors can benefit from buying more shares when prices are low and fewer shares when prices are high, which ultimately averages out the cost per share over time.

This method can be particularly beneficial for long-term investors looking to build wealth gradually without trying to time the market, which can be unpredictable. It emphasizes a disciplined investing habit that reduces the emotional aspect of investment decisions, making it an effective strategy for managing investment risk.