Investing & Markets

Dollar-Cost Averaging (DCA)

Investing a fixed amount of money at regular intervals, regardless of the asset's price.

DCA smooths out the average purchase price over time since you buy more shares when prices are low and fewer when prices are high, without trying to time the market. It's commonly used with automatic contributions to retirement accounts or index funds, and reduces (but doesn't eliminate) the risk of investing a lump sum right before a downturn.

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