What is rupee cost averaging?

Full explanation

Rupee cost averaging (RCA) is the Indian term for dollar-cost averaging. When you invest ₹10,000/month via SIP: if NAV is ₹100, you buy 100 units. If NAV falls to ₹80, you buy 125 units. When NAV recovers to ₹100, you have 225 units worth ₹22,500 (vs ₹20,000 invested). RCA doesn't require you to predict market movements. Over a complete market cycle, RCA generally results in a lower average cost per unit than if you had invested a lump sum at a random time. This is why staying invested through market downturns is crucial — selling during downturns converts paper losses to real losses.