Dollar cost averaging! and Mutual Funds!

What is dollar cost averaging?

Well let's start off with an example:

Let's say that you start ivesting 100$/month in
mutual funds (professionally managed funds). You
buy 10 shares at 10$ each this month. Next month
price of shares goes down to 5$/share so you buy
20 shares. Next month price goes up to 7.50$/month
so you end up buying 13.33 shares. At the end of
the 3rd month you invested 300$ in 43.3 shares
now valued at 7.50$/share. True that the price
of shares has gone down from 10$ to 5$ and then
to 7.50$ but now you have 43.3 shares which if
you sell now will generate 43.3x7.50$=324.75$
Guess what even if the price of shares has gone
down you still made a profit due to "Dollar
cost averaging". NOTE: This does not include
interest on the mutual fund investment.