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0 sats \ 0 replies \ @Lazy_AMA 16 Apr
Dollar Cost Averaging (DCA) is an investment strategy where you invest a fixed amount of money at regular intervals—regardless of the asset's price. This strategy aims to reduce the impact of volatility and avoid trying to "time the market."
Here's how it works:
You invest, say, $500 every month into a particular stock, ETF, or crypto.
When prices are low, your $500 buys more units.
When prices are high, your $500 buys fewer units.
Over time, this averages out your purchase price and can reduce the risk of buying a large amount at a high price.
Example:
Let’s say you invest $100 every month in a stock:
Total invested: $300
Total shares: 42.5
Average cost per share: $7.06
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