Dollar-Cost Averaging: A Simple Way to Invest Consistently

Dollar-cost averaging (DCA) is an investment strategy where I invest a fixed amount of money at regular intervals, regardless of whether prices are rising or falling. For example, I could invest $200 every month for three years in selected stocks, mutual funds or exchange-traded funds. This approach can reduce the pressure of trying to predict the best time to buy. Because the same amount is invested each time, I buy more units when prices are low and fewer when prices are high, which may lower my average purchase cost over time. DCA can be used alongside value, growth or momentum investing. However, frequent purchases may attract brokerage fees, so I should consider transaction costs before adopting the strategy.

Use The App To Win ₦1m

Stories are shared by community members. This article does not represent the official view of NaijaWorld — the author is solely responsible for its content.