DCA – Dollar Cost Averaging

What does DCA – Dollar Cost Averaging mean?

DCA is an acronym for Dollar Cost Averaging. It is a method in which an investor purchases an asset steadily over a period of time in order to lower market volatility.

In this way they are able to purchase more of the asset when the price is low and less when the price is high, but over time it balances out to an average price.

It is a good method for scaling into investments which are planned to be held for a longer time period.