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Investment strategy
What is pound-cost averaging?
An explanation of pound-cost averaging (regular investing), benefits and limits.
Published 3 August 2026 3 min read
The short answer
Pound-cost averaging is investing a fixed amount at regular intervals regardless of market price. It spreads market entry over time, reducing the risk of poor timing and smoothing purchase prices.
How it works
When prices are high your fixed amount buys fewer units; when prices are low it buys more. Over time this can lower the average cost per unit compared with investing a single lump sum at the wrong time.
When it is helpful
It is useful if you are concerned about market timing, have limited funds to invest at once, or prefer predictability in contributions.
What this means in practice
- 1Choose an interval and amount you can sustain.
- 2Check platform minimums and fees for regular investing.
- 3Review your plan periodically rather than react to short-term moves.