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Glossary term

Dollar-Cost Averaging

Invest a fixed sum at regular intervals

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Definition

What is Dollar-Cost Averaging?

DCA (also called rupee-cost averaging in India) is investing a fixed amount on a fixed schedule regardless of price. You buy more units when the market is down, fewer when it is up — so your average cost per unit trends lower than the simple average of prices. The basis of every SIP, 401(k) payroll deferral, and regular ISA contribution.

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