Definition of "Constant Dollar Plan"

An investment strategy where you maintain a constant dollar value in a security or mutual fund. For example, if a constant dollar amount of $100,000. was selected, when ever the value of the investment when over that amount a portion of the investment would be sold to bring the value back to $100,000. When the value went below the $100,000 level, an additional investment would be made to bring the total back up to $100,000. The ideal scenario is to be buying in falling markets and selling in rising markets.