An investor wishes to save for her retirement. She arranges to have $250 per month withdrawn from her account to be invested into a commodity fund. This type of savings plan is called
Dollar cost averaging is a type of investment plan where the customer (investor) will contribute a specific amount of money every fixed period of time. In this case, our investor is investing $250 every month regardless of the price of the securities that she is investing in. Some months she will be able to buy more or fewer securities than other months.
