Personal Finance Term
DCA
Dollar Cost Averaging
An investment strategy where you invest a fixed amount at regular intervals regardless of market price, automatically buying more units when prices are low and fewer when prices are high.
DCA reduces the impact of short-term market volatility on large investments. Instead of timing the market (which is notoriously difficult), you spread purchases over time. EPF contributions are a form of DCA — you invest every month regardless of market conditions.
For Malaysian investors, DCA works well with robo-advisors (which allow automated recurring deposits), unit trust monthly investment plans, and stock market investing via platforms like Rakuten Trade or moomoo. The key is consistency — DCA only works if you stick to the schedule through market downturns.