Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open.

Dollar-cost averaging: How often should one use it? What criteria to use when choosing stocks to apply it to?
Why do people keep talking about 401K's at work?  That is NOT dollar cost averaging.  DCA refers to when you have a large sum of money.  Do you invest it all at once or spread it out over several smaller purchases over a period of time?  There really isn't a "when" should I use it.  It is simply a matter of where your preferences lie on the risk/reward scpectrum.  DCA has lower risk and lower reward than lump sum investing.  In my opinion, I don't like it.  DCA only works better than lump sum investing if the price drops.  But if you think the price is going to drop, why are you buying the stock in the first place? Example: Your uncle wins the lottery and gives you $50,000.  Do you buy $50,000 worth of Apple now, or do you buy $10,000 now and $10,000 a quarter for the next four quarters? If the stock goes up, you will make more with lump-sum(LS) than you will with DCA. If the stock goes down, you will lose more with LS than you will with DCA. If the stock goes up then down, you will lose more with DCA than you will with LS. If the stock goes down then up, you will make more with DCA than you will with LS. So it's a tradeoff.  But, like I said, the whole point of you buying the stock is that you think it's going to go up! So why pick the strategy that performs worse in that scenario?