What is Dollar-Cost-Averaging (DCA)?
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What is Dollar-Cost-Averaging (DCA)?
It’s an investing technique of buying more investments with the same dollar amount on a regular schedule or selling the same number of shares of an investment on a regular schedule. When you are DCA buying, the hope is that the price of the shares will go down over that period of time so that you can purchase more shares at a lower price. When you are DCA selling, the hope is that the price of the shares will go up over that period of time so that you can sell your shares at a higher price. If the opposite occurs for either case, then the strategy does not add value.
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