For the past several months, the stock market has gone on one of its white-knuckle jags. After a reasonably good start to the year, prices started skidding in early May with the so-called Flash Crash punctuating a decline that reached into July.

As prices went lower, talk of a correction morphed into bear-market chatter. A nervy time to invest, that's for sure. More recently, of course, stocks have perked up amid a sea of strong corporate profits.

Looking back from today (isn't hindsight wonderful?), those dark days of spring and early summer, especially the weeks after the Flash Crash, now look like pretty good times to have invested. Not as stark as the generational lows reached in March 2009, but lows all the same.

The volatile nature of recent months underscores the long-term investors' conundrum: When is the right time to get into the market, especially if you have a lump sum to invest, such as a bonus, inheritance or proceeds from a home sale?

One popular method involves dollar-cost averaging. The notion is elegantly simple: Rather than taking the plunge with all of your money at once, you invest a set amount in the market (in this case, we define the market as the Standard & Poor's 500-stock index) each month over a set period of time, thereby sort of wading into the market. As prices fluctuate, the dollar-cost averager will buy more of the market when prices are low, and less when prices are high.

This is modestly different from investing a set amount each month as part of a payroll deduction plan or a quarterly dividend reinvestment plan. You are putting fresh money into the market on a regular basis, something that is a good discipline for a long-term investor-as long as the investment plan is diversified to include more than just stocks.

But let's get back to the lump-sum dilemma. Putting it in all at once sounds suspiciously like market timing. And we know that timing the market is practically impossible. Given the tens of millions of people who invest, some outliers will get lucky for long enough to claim market-timing prowess, but those people often stumble just as they get noticed.

Does dollar-cost-averaging make things better? Let's look at things from the start of the year. If you had gotten an $8,000 Christmas bonus, would you have been better off investing it all at once on the first trading day of the year, or investing $1,000 a month over the first eight months?

After the market closed on Aug. 5, the investor who took the January plunge would have been up about 2.2%, or $173.60 on the initial $8,000. The dollar-cost averager would have fared fractionally better, with a 2.3% gain, or $187.13.

The reason? The plunger bought in January when the market was relativelyexpensive. The dollar-cost averager did, too, but also scooped up the market as it plunged toward lows in July, thereby buying at cheaper levels as well. That's where the dollar-cost averager gained an edge.

Dollar-cost averaging has plenty of critics. For instance, if the market goes up over time, doesn't it make sense to get the money invested right away? This criticism, which basically says dollar-cost averaging is market timing in fancy dress, has some merit. If you started the above example back in September of last year, the dollar-cost averager would come out behind, since Sept. 1, 2009, represented a low point for the stock market during the period.

Others argue that brokers use dollar-cost averaging to ward off the potential wrath of their clients: It prevents the investors from buying at a near-term top -- but it could also rob them of buying at a bottom. Spreading the investment of a lump sum over time diminishes the likelihood of both.

Still, dollar-cost averaging does make sense, especially in volatile markets, which seem increasingly like the norm. Investing a set amount of money over time ensures that you will get more of the market when it is cheap and less of the market when it is expensive.

Many investors make the mistake of buying high-when things are going great-and selling low-when everybody's in a panic. Dollar-cost averaging guards against these damaging animal spirits. That alone is a good reason to have it in your investment quiver.

Dave Kansas

• chatter [´tʃætə] vi.&n.饶舌；闲聊 (初中英语单词)
• invest [in´vest] v.投资；授予 (初中英语单词)
• plunge [plʌndʒ] v.插进 n.投入；冲击 (初中英语单词)
• amount [ə´maunt] n.总数；数量 v.合计 (初中英语单词)
• thereby [´ðeəbai] ad.因此，由此 (初中英语单词)
• discipline [´disiplin] n.纪律；训练 (初中英语单词)
• investment [in´vestmənt] n.投资；(时间等)投入 (初中英语单词)
• stumble [´stʌmbəl] v.摔倒；失足；弄错 (初中英语单词)
• expensive [ik´spensiv] a.费钱的，昂贵的 (初中英语单词)
• instance [´instəns] n.例子，实例，例证 (初中英语单词)
• criticism [´kritisizəm] n.批评；评论(文) (初中英语单词)
• so-called [´sou ´kɔ:ld] a.所谓的，号称的 (高中英语单词)
• inheritance [in´heritəns] n.继承(物)；遗传；遗产 (高中英语单词)
• define [di´fain] vt.解释；说明；限定 (高中英语单词)
• initial [i´niʃəl] a.最初的 n.首字母 (高中英语单词)
• relatively [´relətivli] ad.比较地；相对地 (高中英语单词)
• potential [pə´tenʃəl] n.&a.潜在的；可能的 (高中英语单词)
• kansas [´kænzəs] n.堪萨斯(州) (高中英语单词)
• reasonably [´ri:zənəbli] ad.有理地；合理地 (英语四级单词)
• correction [kə´rekʃən] n.改正，纠正，修改 (英语四级单词)
• dividend [´dividənd, -dend] n.被除数；股息 (英语四级单词)
• prowess [´prauis] n.勇猛；技术；本领 (英语四级单词)
• gotten [´gɔtn] get的过去分词 (英语四级单词)
• increasingly [in´kri:siŋli] ad.日益，愈加 (英语四级单词)
• taking [´teikiŋ] a.迷人的 n.捕获物 (英语六级单词)
• modestly [´mɔdistli] ad.谦虚地；有节制地 (英语六级单词)
• investor [in´vestə] n.投资者 (英语六级单词)
• likelihood [´laiklihud] n.可能，相似性 (英语六级单词)