Here's the explanation of dollar-cost averaging that I find most useful for new investors.

Dollar-cost averaging means investing a fixed dollar amount at regular intervals regardless of what the market is doing. You invest $500 on the first of every month, whether the market is up, down, or sideways.

When prices are high, your $500 buys fewer shares. When prices are low, your $500 buys more shares. Over time, you end up with a lower average cost per share than if you'd bought only when prices were high.

The deeper benefit: it removes the decision of 'is now a good time to invest?' from the equation entirely. There is no decision. The system invests automatically. You don't need to evaluate market conditions, read economic news, or predict anything.

For people who invest from a paycheck on a regular schedule, you are already dollar-cost averaging by default. This is one reason that contributing to a 401k every two weeks is such an effective strategy — the mechanics force regular, automatic investment regardless of market conditions.