Pound-cost averaging is the major benefit associated with regular monthly investing vs lump sum investing.
This phenomenon focuses on the benefit of investing regularly – smoothing out the highs and lows when investing.
In simple terms, the logic is that an investor will buy more shares if the share price falls when investing regularly. An investor will also buy less shares if the share price rises, but the existing shares will have gone up in value.
The idea that more shares are purchased when the share price is lower and fewer when the price is high is believed to result in the average purchase price of a share being lower than the average share price over a mid-long term period.