Dollar-cost averaging (DCA)

The average price method, also known as staggered investing, cost averaging effect, or dollar cost averaging (DCA), is an investment approach in which investors regularly invest a fixed amount of money instead of making a one-time deposit. This means that over time, more shares are purchased when prices are low and fewer when prices are high, which can lead to a lower average purchase price in the long term. Although this method reduces the risk of choosing the worst possible time to make a one-time investment, statistically speaking it leads to underperformance compared to investing the entire capital in a single transaction.

This is due, on the one hand, to the statistical upward trend on the stock market and, on the other hand, to the fact that investments in stocks and bonds generate ongoing dividend and interest income (coupons).

The following blog discusses this topic in detail: Investing in stages: Staggering Investments: Forgoing Returns for a Good Night's Sleep