Strategy

Dollar-Cost Averaging (DCA)

Definition

An investment strategy where you invest a fixed amount at regular intervals regardless of market conditions. DCA reduces the impact of volatility by buying more shares when prices are low and fewer when prices are high.

Related Terms

Volatility

A statistical measure of the dispersion of returns for a given security or market index. High volatility means large price swings; low volatility means stable prices. The VIX index measures expected volatility of the S&P 500.

← Back to full glossary

Get Smarter About Investing

Free weekly market insights, calculator updates, and investing education.