How Dollar Cost Averaging Works

Did you know that the UC Retirement Savings Plans have a built-in way to let you use a time-tested investment technique?

It’s called dollar-cost averaging. Simply put, dollar-cost averaging is what you do when you steadily invest in your UC Retirement Savings Plan accounts.

The benefit? You get the chance to buy low and sell high—and that means you may be able to benefit when markets drop.

Here's how it works

You devote a fixed amount to each of your plan investments every pay period, regardless of what’s happening in the market.

Over the years, your paycheck deductions buy more shares of each investment option when prices are lower and fewer shares when prices are higher.1

But investors often stop contributing entirely during significant downturns in the stock market—short-changing the potential for growth. No matter how quickly the stock market recovers, continuing your UC Retirement Savings Plan contributions could help put you in a position to benefit when it does.


Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

1 Dollar cost averaging doesn’t ensure a profit or protect against loss. For the strategy to be effective, you will need to continue making purchases during periods of low price levels.

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Dollar-cost averaging explained