dollar cost averaging

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Definition of dollar cost averaging in English English dictionary: Investing a fixed amount of dollars in a specific security at regular set intervals over a period of time, thereby averaging the cost paid per share; One of the benefits of investing a set amount of money, at regular intervals, over a long period of time This means an investor could gain an advantage from rises and falls in the investment price, buying more when the price is low and less when the price is high; An investment strategy through which money is invested consistently over time through periods of fluctuating prices Steadily investing regular amounts through periods of high and low prices, you may be able to lower the average cost of your shares or units; Investing the same amount of money in the same investments at fixed intervals, often monthly If the price rises, you buy fewer shares; if it drops, you acquire more shares This is a long-term strategy that can result in, but does not guarantee, a lower average cost per share; A method of investing that calls for the investment of a set dollar amount at regular intervals, regardless of the fund's share price As a result, more fund shares are bought when prices are low than at high prices, usually bringing down an investor's average cost per share over time Dollar cost averaging does not, however, guarantee a profit or protect against a loss; A technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price; thus purchasing more shares when prices are low, and fewer shares when prices are high Over time, the average cost per share of the security will become smaller This method attempts to lessen the risk of investing a large amount in a single investment at the wrong time Used with mutual funds and dividend reinvestment plans; A strategy of buying securities (typically mutual funds) in fixed dollar amounts at scheduled intervals, with the aim being to lower the average cost per share over time Dollar cost averaging does not assure a profit and does not protect against loss in declining markets; a method of investing in a particular equity by investing a fixed amount at regular intervals (such as monthly buying $1000 worth of MSFT every month You buy it at 71, 83, 76, 90 Your dollar cost average is 80); A system of buying securities at regular intervals with a fixed dollar amount Under this system investors buy by the dollars' worth rather than by the number of shares If each investment is of the same number of dollars, payments buy more shares when the price is low and fewer when it rises Thus temporary downswings in price benefit investors if they continue periodic purchases in both good times and bad and the price at which the shares are sold is more than their average cost; An investment strategy based on making investments of equal amounts at regular intervals in the same fund or security The average cost of the shares purchased may generally be lower than if a lump sum investment was made However, dollar-cost averaging does not assure a profit or protect against a loss in a declining market Investors should always consider their ability to continuously invest during fluctuating price levels; A system of buying a fixed dollar amount of a stock at regular intervals, regardless of the share price More shares are bought when the price is lower and fewer when it's higher Dollar Cost Averaging (DCA) reduces the risk of choosing a wrong time to get into a stock because it results in lower average cost than the average price of the stock during that period DCA isn't a good strategy to use when you have the money already available because stocks tend to rise in price and not investing when you can will decrease your potential gains, but it is useful from the psychological point of view Many mutual funds and companies with dividend reinvestment plans let people use automatic investment plans that invest the same amount of money each month or quarter; A method of accumulating assets by investing a fixed amount of dollars of securities at set intervals The investor buys more shares when the price is low and fewer shares when the price is high The overall cost is lower than it would be if a constant number of shares were bought at set intervals; Investment strategy where the same security is purchased periodically in order to achieve an average cost For example: John Smith purchases 100 shares of XYZ Corp for $80 each on May 1 On June 1, he purchases another 100 shares of XYZ for $60 each As a result, Mr Smith now owns 100 shares of XYZ at an average cost of $70 per share If Mr Smith later sells 200 shares of XYZ for $75 each, he earns for a total profit of $5 per share on 200 shares even though he purchased the first 100 shares for $80 per share This strategy is often advocated for long-term investors with regular savings habits, as the market’s long-term overall direction is generally higher; An investment timing strategy where an investment of a constant amount is made in the same security or mutual fund at regular time intervals, regardless of the market prices or conditions Also see Example Of Dollar Cost Averaging; Investing a set amount of money, at regular intervals, over a long period of time The investor could gain an advantage from rises and falls in the investment prices over a period of time by buying more when the price is low and less when the price is high; Investing equal amounts of money at regular intervals The money deducted from your paycheck if you participate in your company's 401(k) program is an example of dollar cost averaging Theoretically, you will buy more shares when the price of your investment has declined, and fewer shares when the price has risen This may lead to an overall cost basis that is lower than the average price per share; Periodic investment of a fixed dollar amount, as in a particular stock or fund or in the market as a whole, on the belief that the average value of the investment will rise over time and that it is not possible to foresee the intermediate highs and lows; Buying securities in a given investment at scheduled intervals at the same dollar amount over a period of time; Investing a set amount of money, at regular intervals, over a long period of time This means an investor could gain an advantage from rises and falls in the investment price, Over a period of time by buying more when the price is low and less when the price is high; Long-term investment strategy in which you invest a certain number of dollars at regular intervals, such as monthly or quarterly, rather than buying a certain number of shares of securities When the price is low, your dollars buy more shares and reduce the average price of all of the shares you own To be profitable, dollar cost averaging depends upon the price at which you eventually sell the securities to be higher than your average share cost See also DRIP; An investment strategy that calls for investing a fixed amount of money at set intervals (e g monthly or quarterly) With a dollar cost averaging (DCA) program the investor buys more shares when the price is low and fewer shares when the price is high, thus reducing the average cost paid over time There can be no guarantee that a DCA program will lead to a gain or avoid a loss; Way to invest at a specific time each month no matter what the share price is This means more shares are purchased when prices are low and fewer shares are purchased when the price is high; This is a method of investing Money is invested at regular intervals in the same investment Because you invest the same amount each time, you automatically buy less of the investment when its price is higher and more when its price is lower Though the method doesn't guarantee a profit or guard against loss in declining markets, the average cost of each share is usually lower than if you buy at random times For dollar cost averaging to work you must continue to invest regularly over time and purchase shares in both market ups and downs; A principle that involves the investment of a fixed amount of money at regular intervals The goal is to reduce the average cost per share by acquiring more shares when prices are lower and fewer shares when prices rise; A financial strategy of making investments at regular intervals with a fixed dollar amount A key benefit is that over time, your average per unit cost should be lower than either the market high or the average price Dollar cost averaging does not guarantee a profit or protect against a loss It involves continuous investment in securities regardless of fluctuating prices You should consider your financial ability to continue purchases through periods of low price levels