Back to Home
DCA
(Dollar Cost Averaging)
DCA (Dollar Cost Averaging) is an investment strategy where fixed dollar amounts are invested at regular intervals regardless of price, reducing market timing risk. For example, investing $500 monthly in an ETF.
DCA smooths purchase prices - buying more shares when prices are low, fewer when high. Studies show DCA outperforms lump-sum investing 66% of the time in volatile markets. Popular for 401k contributions and crypto investments like BTC. While reducing downside risk, DCA may underperform during sustained bull markets. The strategy works best with 12+ month timeframes and disciplined execution, helping investors avoid emotional decisions during market swings.
DCA smooths purchase prices - buying more shares when prices are low, fewer when high. Studies show DCA outperforms lump-sum investing 66% of the time in volatile markets. Popular for 401k contributions and crypto investments like BTC. While reducing downside risk, DCA may underperform during sustained bull markets. The strategy works best with 12+ month timeframes and disciplined execution, helping investors avoid emotional decisions during market swings.