Dollar Cost Average

DOLLAR COST AVERAGING (DCA) REFERS TO THE PRACTICE OF SYSTEMATICALLY INVESTING EQUAL AMOUNTS, SPACED OUT OVER REGULAR INTERVALS, REGARDLESS OF PRICE. YOU DIVIDE UP THE AMOUNT OF MONEY YOU'D LIKE TO INVEST AND BUY SMALL QUANTITIES OVER TIME AT REGULAR INTERVALS. THE GOAL OF DOLLAR-COST AVERAGING IS TO REDUCE THE OVERALL IMPACT OF VOLATILITY ON THE PRICE OF THE TARGET ASSET. THIS DECREASES THE RISK THAT YOU MIGHT PAY TOO MUCH FOR A SINGLE PURCHASE BEFORE MARKET PRICES DROP. DCA TAKES THE GUESSWORK OUT OF INVESTING AND GREATLY SIMPLIFIES THE PROCESS. ALWAYS HAVE SOME DRY POWDER FOR A DIP IN PRICE.