Dollar-Cost Averaging

What is DCA?

Dollar-cost averaging (DCA) is a strategy where you invest the same amount of money at regular intervals, regardless of the asset’s price. When prices are high you buy fewer shares; when prices are low you buy more. Over time this reduces your average cost per share【399327993456002†L220-L237】.

Benefits

• Builds investing habits: a regular schedule fosters discipline and removes guesswork【399327993456002†L292-L319】.
• Reduces timing stress: you don’t need to decide when to buy; simply invest on schedule【399327993456002†L292-L319】.
• Lowers average cost: buying more when prices are low reduces the overall cost basis【399327993456002†L232-L237】.

Example

Suppose you invest ₩100,000 every month. In months when the price is high you purchase fewer shares, and when the price is low you purchase more. Over time your total holdings increase and your average cost per share decreases. DCA helps harness the power of compounding through consistent investing.

However, if the market trends downward for a long time, losses may occur. It’s important to understand the fundamentals of your investments and combine DCA with diversification.