Dollar-cost averaging
Dollar-cost averaging is investing a fixed amount at regular intervals regardless of price, so you buy more shares when prices are low and fewer when high.
Dollar-cost averaging (DCA) means investing a set sum on a fixed schedule — say $500 every month — no matter what the price is that day. Because the amount is constant, you automatically buy more shares when prices are low and fewer when prices are high, and you avoid the trap of trying to time the market’s ups and downs.
The main benefit is behavioral and practical: it removes the emotion and guesswork from deciding when to invest, and it smooths out your average purchase price over time. It does not guarantee a profit or protect against loss, and lump-sum investing has often done better historically simply because markets tend to rise — but DCA suits how most people actually earn and save.
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