Glossary
Dollar-cost averaging (DCA)
Investing a fixed amount on a fixed schedule regardless of price, which smooths your average entry. A simple, robust default for regular contributions.
In plain terms
DCA's real power is behavioural, not mathematical: it removes the timing decision entirely, which removes the temptation to wait for a dip that may never come. For money that arrives as salary, DCA isn't even a choice — it is just investing income as it appears.
When you already hold a lump sum, statistics favour investing it sooner rather than spreading it out, because markets rise more often than they fall. Our front-loading study quantifies that trade-off on a century of data.
Related terms
Educational definitions only. Not investment advice.