Rupee Cost Averaging (RCA) is an investment strategy that involves investing a fixed amount of money at regular intervals, regardless of the price of the investment at that time. This approach aims to reduce the impact of market volatility on an investor’s portfolio by spreading out the purchase of investments over a period of time.
For example, if an investor wants to invest in the stock market using RCA, they may invest Rs. 5,000 every month for a year, regardless of whether the market is up or down. This way, the investor is buying shares at different prices, which can help to reduce the risk of investing a large amount of money at a single price point.