The Benefits of Dollar-Cost Averaging

October 4, 2021

Dollar-cost averaging (DCA) is an investment strategy in which an investor makes regular purchases of an asset at a fixed interval (usually monthly) using the same dollar amount each time, regardless of the asset’s current price. This means that when the asset’s value decreases, the investor is purchasing more shares, and when the value increases, the investor is purchasing fewer shares. This decreases the risk that an investor might pay too much for an investment right before the market drops, and over time, the average cost per share will almost always be lower than the asset’s average market price.

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