Activity

Dollar-Cost Averaging

Dollar-cost averaging (DCA) is when you invest a fixed amount on a regular basis regardless of market developments.

This practice can work well long term for assets that reflect the value of the entire stock market (or a big part of it).

Long term, we can expect the stock market as a whole to gain value. So if you invest part of your income every month, say, then your position will grow in the long run.

In the meantime, you get to reduce risk by not investing all your money at once. You also get to react to developments that affect the stock market and can decide to interrupt your investment schedule. But I personally like ‘boring’ investment strategies, meaning strategies that are automated and reliable.