Dollar-Cost Averaging (DCA)

Dollar-Cost Averaging (DCA) is an investment strategy that involves making regular incremental investments over a period of time, usually shorter than a year.

Adopting a DCA strategy can spread out your investment entry points and potentially achieve a lower average cost base, which means you purchase a greater number of units for the same investment amount.

DCA is generally used for more volatile investments such as stocks, mutual funds and cryptocurrency. It is also a good strategy for investors with lower risk tolerance since investing a lump sum of money into the market all at once can run the risk of buying a peak.

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