How to Do Dollar-Cost Averaging with Passiv?

Dollar-cost averaging (DCA) is an investment strategy where an investor allocates a sum of money over a series of equal, regularly spaced investments.

Over time, the market generally goes up, but short-term volatility can make it difficult to invest a lump sum without fearing a big dip right after. If you’re investing for the long-term and not interested in trying to time the market, DCA may be the right strategy for you.

However, one of the downsides of DCA is the work involved in managing it. Passiv can help you automate your DCA strategy with its cash management feature. Here’s how.

Let’s say you have $30,000 CAD to invest and you want to invest it using DCA over the next year. You decide to allocate $1,250 bi-weekly to limit volatility risk. To do this using passiv:

Go to the portfolio group you want to apply your DCA strategy to and go to Portfolio Settings.

In the Cash Management section, click Add Rule.

Select the account containing the $30,000. In Rule, select Allocate at most (Retain at least will do the opposite of allocate at most and retain a certain amount of cash in your account). Then select the currency and the amount you want for this rule: in this case, CAD and 1,250.

Then click Submit.

Passiv will invest a maximum of $1,250 CAD from your account every time it recommends trades, until there is no more cash in your account.

Note: When cash rules are enabled, accuracy may not get to 100% because cash is still sitting in the account to invest.