Optimize your entry price in volatile markets
The smart way to invest in volatile markets
Buying more units when prices are low and fewer when high results in a lower average cost per unit over time.
Mitigates the risk of investing a large lump sum at the wrong time (market peak).
Eliminates the need to predict market movements, preventing panic selling or euphoria buying.
Encourages a regular investment habit, regardless of market conditions.
DCA tends to smooth out the volatility of the investment portfolio over the long term.
Allows you to start building wealth with small, regular amounts instead of waiting for a large corpus.
Dollar Cost Averaging (DCA), also known as Rupee Cost Averaging in India, is an investment strategy where you invest a fixed amount of money at regular intervals, regardless of the share price. By doing so, you buy more shares when prices are low and fewer shares when prices are high.
No need to time market
Builds habit
Lowers average cost
Example: Investing ₹5,000 every month
| Month | Investment | Unit Price | Units Bought |
|---|---|---|---|
| Jan | ₹5,000 | ₹50 | 100 |
| Feb (Market Down) | ₹5,000 | ₹40 | 125 (More!) |
| Mar (Market Up) | ₹5,000 | ₹60 | 83.33 (Less) |
Common queries about DCA
No, DCA does not guarantee profits. If the market continues to fall indefinitely or the asset performs poorly over the long term, you can still lose money. However, it effectively averages out the purchase price.