Dollar-Cost Averaging
Also called: dca
Investing a fixed amount on a regular schedule, regardless of price.
Dollar-cost averaging means buying the same dollar amount every week or month, so you buy more shares when prices are low and fewer when high. It removes the temptation to time the market and turns investing into a boring, automatic habit, which is exactly why it works for most people.
For example
Investing $300 every month buys about 15 shares at $20 and about 12 shares at $25, smoothing your average price over time.
Related terms
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