One strategy that can work well with mutual funds is dollar-cost averaging. Essentially, you invest a fixed sum of money into the mutual fund on a regular basis regardless of where the market stands. Retirement plans and 401(k) plans are generally built on this principle, except they have restrictions on the withdrawal end.

Frequently, an investor will decide to have the same amount of money automatically withdrawn from her account and invested into the mutual fund on a consistent weekly, or monthly, basis — not unlike a 401(k) or retirement plan. Over time, a fixed amount invested regularly, as opposed to buying a fixed number of shares, will reduce the average cost per share. By putting in the same amount, you are buying more shares when the prices are low and fewer shares when the prices are high.

Dollar-cost averaging also eliminates the problems of “timing the market,” which can devastate a portfolio. The volatility of the market in recent years has made this method particularly difficult. Fund managers, however, spend a great deal of time trying to time the market — with varying results. And market timing is definitely not advised for novice investors.

Dollar-cost averaging can be emotionally difficult at times, though. By investing on a regular basis, you will also be investing during bear markets. But that can be a good thing, especially when you know that effective fund managers will be filling the portfolio with securities that will best weather a market downturn.