dollar-cost averaging

(redirected from DCA)
Also found in: Medical, Acronyms, Encyclopedia, Wikipedia.

Dollar-Cost Averaging

An investment strategy in which one makes investments in the same dollar amount at regular times. For example, one may buy $1,000 in Stock A every month, regardless of Stock A's current price. Because this means one buys fewer shares when the price is high and more when the price is low, dollar-cost averaging aims to reduce the average cost of the shares one buys. This increases the profit per share when one sells the stock. Dollar cost averaging is most common with shares of a mutual fund or a retirement plan. It is also called a constant dollar plan.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

dollar-cost averaging

Investment of a fixed amount of money at regular intervals, usually each month. This process results in the purchase of extra shares during market downturns and fewer shares during market upturns. Dollar-cost averaging is based on the belief that the market or a particular stock will rise in price over the long term and that it is not worthwhile (or even possible) to identify intermediate highs and lows. Also called averaging.
What types of investors should use dollar-cost averaging?

When asked what the market was going to do, J. P. Morgan reportedly said, "It will fluctuate." Morgan was right! This concept refers to putting a fixed amount of money into securities periodically. In so doing, one's average price per share is lower than the mean average price during the holding period. This is basic math: $100 buys 10 shares of a stock at $10, and 5 shares at $20 when the market is higher. The mean average price is $15. But the investor owns 15 shares and paid just $200 for an average price per share of just $13.33. TIP: A good approach for smaller investors just getting started, and also for IRAs. It works particularly well with diversified mutual funds.

Thomas J. McAllister, CFP, McAllister Financial Planning, Carmel, IN
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
2d DCA 2009), in holding that a lack of written findings in awarding temporary alimony does not require reversal when the award is supported by competent, substantial evidence.
Muhammad Arkab, 19-year-old fast bowler, who had played U-19 and first class cricket from Islamabad, said: 'I came some 15 months back from Mardan to play at DCA. Trust me, I was raw material but only in a few months, I was completely transformed and provided with an opportunity to play for Islamabad and then for the country.
J774A.1 cells were treated with LPS (1 [micro]g/ml) for 5h before DCA (100 [micro]M) stimulation in the presence or absence of different inhibitors (e.g., JTE013 and U0126), then supernatants were harvested and the release of bioactive IL-1[beta] was determined by Western blot and ELISA according to the manufacturer's instructions (eBioscience).
Delta's partnership with CLEAR already gives exclusive rates to U.S.-based SkyMiles Members for a faster way through security lines at more than 20 airports nationwide, including DCA.
Although the peeled materials have been confirmed inside the DCA devices in these cases, we could not cancel the possibility of distal embolization of these materials if they are prolapsed from the housing of debulking cutter.
And because we've had such an impressive track- record using this tool as our flagship, DCA is now recognized on the market as a proven, cost-effective toolset that can dramatically reduce the effort and risk associated to any system migration."
Outgoing DCA President Frank Patterson looks back on 2015 as a very productive year for DCA as the association continued expanding its influence in the natural gas and pipeline industry.
The assets acquired through the transaction include Group DCA's proprietary DIAGRAM (DIAlog, GRAphics and Motion) Platform and The Medical Bag, a general interest website for health care professionals (www.themedicalbag.com), along with the staff to support the business.
It was attended by Shaikh Faisal bin Saoud Al Qasimi, Assistant Director for Operations, Sharjah; Khaled Al Kilany, director of Air Transport, Sharjah; Ahmed Abdullah bin Ali, director of Government Communication, Sharjah; Maryam Mubarak Bu Thani, manager of Air Transport, Sharjah; and Abdullah Al Hammadi, director of DCA Services, Ras Al Khaimah.