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Dollar Cost Averaging - DCA
What does it mean?
The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares when prices are high.
In Other Words...
Eventually the average cost per share of the security will become smaller and smaller. Dollar cost averaging lessens the risk of investing a large amount in a single investment at the wrong time.
In the U.K., Dollar Cost Averaging is known as "Pound Cost Averaging."
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Related Terms
Automatic Investment Plan | Average Down | Average Up | Compounding | DRIP | Mutual Funds
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