Dollar-cost-averaging (DCA)

Dollar-cost-averaging – A system of buying securities atregular intervals with a fixeddollar amount. Under this system investors buy by the dollars' worth rather than bythe number of shares. If each investment is of the same number of dollars, payments buy more shares when the price is low and fewer when it rises. Thus temporary downswings in price benefit investors if theycontinue periodic purchases in both good and bad times, and the price at which the shares are sold is more than their average cost. Dollar-cost-averaging does not assure a profit and does not protect against loss in declining markets. Since dollar-cost-averaging involves continuous investment in securities regardless of fluctuating price levels of such securities, investors should consider their financial abilityto continue purchases through periods of low pricelevels