The debate between dollar-cost averaging and lump-sum investing isn’t new, but it remains one of the most misunderstood concepts in personal finance. Investors regularly choose the strategy that feels safer while sacrificing returns they could have captured. The disconnect between what performs better historically and what investors actually do reveals a fundamental tension in portfolio management: the trade-off between mathematical optimization and psychological comfort.

What Each Strategy Actually Means

-cost averaging involves spreading investment capital across regular intervals rather than deploying it all at once. An investor with $12,000 to invest might allocate $1,000 monthly over a year instead of investing the full amount…