Dollar-cost averaging (DCA)

Dollar-cost averaging, often called rupee-cost averaging or SIP-style investing in India, means investing a fixed amount at regular intervals, for example ₹2,000 every week, regardless of the price. When prices are low your money buys more units, and when they are high it buys fewer.

DCA removes the pressure of trying to time the market and smooths out the effect of volatility on your average purchase price. It does not guarantee a profit: if the price trends down over your whole investing period, you still lose money. Studies of traditional markets also show that lump-sum investing has tended to beat DCA on average when markets rise, because more money is invested sooner. DCA trades some expected return for lower regret and discipline.

Check fees, since many small purchases can cost more in fees and spreads than one large one.