Bryan
Bryan

DCA

Definition

DCA is an abbreviation of Dollar-cost averaging. It means regularly putting a set amount of money into an investment account, usually monthly or quarterly. 

DCA used in a sentence and practice

  • ‘’One advantage of dollar-cost averaging is that you may remove the emotional component from your decision-making by investing automatically’’. 
  • ‘’You can generate a potentially greater profit from buying during dips and selling at the top. However, there’s broad consensus that DCA is a safer overall method of investing than lump sum buying and selling. It’s lower risk and lower reward but still offers the chance of benefiting from market swings.’’, Source: Gemini (crypto exchange).
  • ‘’I want to invest some of my money, should I DCA or should I throw it all in at once?’’. 

Further research

In addition, some papers show that you will have a higher expected return if you invest everything at once for 2 out of 3 times, versus DCA. Here is a 5-minute video that explains why lump sum investing might be better than DCAl:

Bryan
Bryan

Bryan indulges in every bit of crypto-related news and material he can lay his hands on. As such, he often shares his views and advice through the onXRP content platform. He is a firm believer in crypto’s potential in the financial and economic world. With 5 years of experience in investing and trading Bryan brings excellent insights to the table. He is excited to bring much of this knowledge and many of his skills to the onXRP platform.