noun Internet Slang

dollar cost averaging

DOL-ur KOST AV-rij-ing · noun · informal

Investing a fixed amount at regular intervals regardless of price.

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Definitions

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Dollar cost averaging (DCA) is investing a fixed sum at regular intervals no matter the price, so you buy more units when prices are low and fewer when high, smoothing the average cost. It reduces the risk of poor market timing.

“Instead of timing the market she just dollar cost averages a hundred quid in every Friday.”
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dollar cost averaging In A Sentence

Instead of timing the market she just dollar cost averages a hundred quid in every Friday.

Origin & Usage

Descriptive finance term; the 'averaging' refers to the resulting average purchase price over time.

Variants DCAdollar-cost averaging
Tags #finance#stocks#wsb#strategy#discipline

People Also Ask

What is dollar cost averaging?

It's investing a fixed sum at regular intervals regardless of price, so you buy more units when prices are low and fewer when high, smoothing your average cost.

Why do investors use DCA?

It reduces the risk of poor market timing and removes emotion, since you invest the same amount on a schedule rather than trying to pick the bottom.

What does DCA stand for?

Dollar cost averaging — 'averaging' refers to the average purchase price you end up with over time.

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