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| Dollar-Cost Averaging (DCA) |
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The technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. More shares are purchased when prices are low, and fewer shares are bought when prices are high.
Also referred to as a "constant dollar plan".
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Eventually, the average cost per share of the security will become smaller and smaller. Dollar-cost averaging lessens the risk of investing a large amount in a single investment at the wrong time.
In the U.K., it is known as "pound-cost averaging".
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