Which of the following best describes the strategy of dollar-cost averaging?

The strategy of dollar-cost averaging involves consistently investing fixed amounts of money over a period of time, regardless of the asset's price. This method mitigates the impact of market volatility by purchasing more shares when prices are low and fewer shares when prices are high, which can ultimately lead to a lower average cost per share over time. This disciplined approach helps investors avoid the pitfalls of trying to time the market and reduces the emotional stress associated with investing.

This technique aligns with a long-term investment strategy, promoting regular contributions which can build wealth over time through the power of compounding returns. It is particularly beneficial in fluctuating markets, as it encourages a steady investment practice rather than lump-sum investments which can be more susceptible to timing risk.