Dollar Cost Averaging (DCA) is an investment strategy where you invest a fixed amount of money at regular intervals, regardless of the market's performance. By doing this, you automatically buy more units when prices are low and fewer units when prices are high. Over time, this lowers your average cost per unit compared to trying to "time the market." It reduces the impact of short-term market volatility and eliminates the emotional stress of deciding exactly when to enter the market.

Returns on SIPs depend heavily on the asset class you choose. For equity mutual funds, long-term investors (10+ years) typically anticipate annualized returns between 10% and 12%, though this is not guaranteed and varies with market cycles. Debt funds usually offer lower, less volatile returns in the range of 6% to 8%. Hybrid funds, which mix both equity and debt, generally perform somewhere in the middle. It is wise to set conservative expectations (e.g., 10% for equity) when planning your financial goals.