Dollar Cost Averaging

DCA

1. | strategy

A method of investing which involves investing into an asset over an extended period of time, making purchases at set intervals. This leads to an average entry price, taking out some risk of short term volatility.

1.1

Buying $1,000 worth of an asset every month for 3 months. In the first month $1,000 buys you 1 coin, in the second month $1,000 buys you 2 coins, in the third month $1,000 buys you 1.5 coins. You’ve now spent $3,000 and hold 4.5 coins for a dollar cost average of $666.66 per coin.

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