What Is Dollar-Cost-Averaging: Is It the Best Way to Invest?

Want excellent investment advice? Buy low, sell high. This desirable but overly simplified strategy means you should buy shares at a low price and sell them when they are at a higher price.

For many of us, emotions and stress levels play a role in constructing our investment portfolio, making dollar-cost-averaging a legitimate strategy.

Dollar-cost-averaging (DCA) is a systematic program of investing equal sums of money at regular intervals regardless of the investment’s price.

What is Dollar-Cost-Averaging?

DCA is similar to the buy-and-hold investment strategies that look past short-term noise in the market.

You’re Probably Already Using the DCA Approach

Essentially, it provides short-term downside protection by taking advantage of gyrations.

Reduces Risk

Investors are making purchases at regular intervals and fixed amounts instead of poorly timed lump sum investments.

Investor Discipline

Dollar-Cost-Averages reduce the average cost of shares purchased over a relatively long term.

Help You Lower Your Cost Basis

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