There is an old maxim for investing – time in the market is more important than timing the market. The unpredictability of financial markets has often been the downfall of investors who try to guess the right time to invest. We all agree that if you get lucky and purchase an investment when prices are at the bottom, there's nowhere to go but up. However, this low price is impossible to predict.

Conversely, if you buy at a high point, you may have a long wait until you can sell at a profit. Dollar cost averaging is an investment strategy that tries to reduce market value risk by investing a fixed-dollar amount at regular intervals. Dollar cost averaging works to reduce market risk exposure because customers buy more shares when prices are low and fewer shares when prices are high. Systematic purchases over a long period at highs and lows, when averaged, effectively reduce market risk by minimizing the chance of buying at the wrong time.