Dollar-Cost Averaging

Dollar-Cost Averaging (DCA) is an investment strategy in which an investor regularly invests a fixed amount of money into a particular asset—regardless of its current price—over a defined period. This approach results in purchasing more units when prices are low and fewer units when prices are high, potentially reducing the average cost per unit over time. In India, Systematic Investment Plans (SIPs) in mutual funds are the most common application of Dollar-Cost Averaging, making it an accessible wealth-building strategy for retail investors.