What Is Dollar-Cost Averaging?: DCA means investing a fixed amount regularly, regardless of market conditions, to lower the impact of market volatility over time.
What Is Dollar-Cost Averaging
Reduces Emotional Investing: By automating investments, DCA helps avoid impulsive decisions driven by fear or greed during market highs and lows.
Works Best in Volatile Markets: DCA is more effective when markets fluctuate, as it allows investors to buy more units when prices are lower.
Long-Term Growth Potential: While not always outperforming lump-sum investing, DCA builds discipline and consistency, potentially growing wealth steadily over time.
Not Ideal for Sudden Gains: DCA may underperform during strong bull runs, where lump-sum investing can capture more upside faster.