In a prolonged bull market, what is a potential downside of dollar-cost averaging?

• A. Achieving perfect timing
• B. Buying at relatively high prices and missing out on lump-sum investing advantages
• C. Always beating the market
• D. Reducing diversification

Answer: (B)

Dollar-cost averaging spreads investments over time, buying a fixed amount at regular intervals regardless of price. In a prolonged bull market, prices rise over an extended period. Because you’re invested gradually, you end up purchasing some shares at higher prices later on, which can raise your overall average cost per share compared with putting the entire amount to work at the start. That means you miss out on the immediate exposure to上涨 in prices that a lump-sum investment would capture, potentially leading to a lower overall return. Dollar-cost averaging reduces timing risk, but in a sustained uptrend it can underperform the lump-sum approach.