Nvidia (NASDAQ:NVDA) has been one of the best-performing stocks of the last decade, benefiting from advancements in artificial intelligence (AI), cloud computing, and gaming. However, its high price and volatility make it a challenging stock for Canadian investors to buy.
One way to manage risk and build a long-term position in Nvidia (NASDAQ:NVDA) is through dollar-cost averaging (DCA ) — a strategy where investors buy a fixed dollar amount of stock at regular intervals instead of making a lump-sum purchase.
To use DCA effectively, Canadian investors need to learn which accounts to use (either TFSA, RRSP, or taxable), and which trading platforms to use, such as Wealthsimple or Questrade among others.
What is dollar-cost averaging (DCA)?
DCA is an investment strategy where you invest a fixed amount of money at regular intervals, regardless of the stock’s price. Over time, this smooths out the impact of market volatility and can reduce the risk of buying at a peak.
Example of DCA with Nvidia for a Canadian investor
- Instead of buying $12,000 worth of Nvidia (NASDAQ:NVDA) all at once, you decide to invest $1,000 per month for 12 months.
- Some months, Nvidia may be expensive; other months, it may be cheaper.
- This strategy reduces the impact of market swings and ensures you don’t buy at a short-term high.
Why DCA works well for Canadian investors buying Nvidia
1. Reduces risk of market timing
- Nvidia (NASDAQ:NVDA) is highly volatile, and its price can swing 5% to 10% in a single day.
- By investing consistently, you avoid making emotional decisions based on short-term price movements.
2. Helps manage currency risk for Canadians
- Nvidia (NASDAQ:NVDA) trades in U.S. dollars, meaning Canadian investors face currency fluctuations and withholding tax when trading this stock.
- DCA helps average out currency exchange rates over time, reducing the risk of buying when the Canadian dollar is weak against the U.S. dollar.
3. Easy to automate with Canadian brokerages
- Some platforms like Wealthsimple Trade and Questrade allow investors to set up recurring stock purchases, making DCA fully automated.
- Even if you use a brokerage that doesn’t offer automated DCA, you can still manually buy a fixed amount each month.
Which Canadian accounts are best for Nvidia DCA?
1. TFSA (Tax-Free Savings Account)
✅ Best for long-term growth because all gains are tax-free.
✅ No taxes on capital gains or dividends.
🚨 Downside: Nvidia doesn’t pay a dividend, so this is only useful for long-term capital gains.
2. RRSP (Registered Retirement Savings Plan)
✅ Contributions are tax-deductible, reducing taxable income.
✅ Great for Nvidia because there are no withholding taxes on U.S. stocks inside an RRSP.
🚨 Downside: Withdrawals in retirement are taxed as income.
3. Taxable Account
✅ Good for flexibility (no withdrawal restrictions).
🚨 Downside: Capital gains are taxable at 50% in Canada.
🚨 Currency conversion fees may apply.
Which Canadian brokerages support DCA for Nvidia?
In Canada, several trading apps and discount brokerages support dollar-cost averaging (DCA) — either directly through automated features or by making it easy to manually implement. Here’s a breakdown by category:
Trading apps and brokerage platforms with DCA support (automated or easy manual execution)
1. Wealthsimple Trade
- DCA Support: ❌ No built-in auto-investing for stocks/ETFs, but ✅ Wealthsimple Invest (robo-advisor) does support automated DCA.
- How to DCA: Set up recurring deposits + manual buys or use auto-invest portfolios via Wealthsimple Invest.
- Good for: Beginners, TFSAs, RRSPs, fractional shares.
2. Questrade
- DCA Support: ❌ No auto-buy function, but ✅ can schedule pre-authorized deposits and manually place recurring trades.
- How to DCA: Use calendar reminders or automate through external tools or APIs.
- Good for: DIY investors; supports TFSAs, RRSPs, LIRAs, RESPs, etc.
3. National Bank Direct Brokerage (NBDB)
- DCA Support: ❌ No automated DCA tool, but $0 commission trading makes manual DCA cost-effective.
- How to DCA: Schedule recurring deposits and buy ETFs/stocks manually.
- Good for: Zero-commission ETF investors.
4. RBC Direct Investing
- DCA Support: ❌ No automation for DCA, but allows scheduled contributions and manual orders.
- How to DCA: Use their online banking to set recurring transfers, then execute trades manually.
- Good for: RBC clients who want everything in one place.
5. TD Easy Trade
- DCA Support: ❌ No automation, but you get commission-free TD ETFs, making DCA more feasible manually.
- Good for: Casual investors who want simplicity and mobile-first trading.
6. Scotia iTRADE
- DCA Support: ❌ No auto-invest tool, but allows pre-authorized contributions into accounts.
- Good for: Investors who prefer traditional banks and plan to DCA manually.
7. BMO InvestorLine
- DCA Support: ❌ Manual only, no automation tools.
- Good for: DIY investors with BMO ties.
Robo-advisors that fully automate DCA
If you’re looking for a fully hands-off DCA experience, robo-advisors are the easiest way and, for Canadians, these include:
- Wealthsimple Invest
- Supports DCA? ✅ Yes
- Set it and forget it. Fully automated, including rebalancing.
- Questwealth (Questrade)
- Supports DCA? ✅ Yes
- Lower fees than Wealthsimple, but less flexible interface.
- CI Direct Investing
- Supports DCA?: ✅ Yes
- Offers SRI (socially responsible investing) portfolios.
Summary: Best brokerage option based on DCA goal
DCA vs. lump-sum investing: Which is better for Nvidia?
A common question is: “Should I just buy Nvidia all at once instead of using DCA?”
✅ Lump-sum investing is better if the market is in an uptrend, because historically, stocks tend to rise over time.
✅ DCA is better if you’re worried about short-term volatility and want to spread out your risk.
Since Nvidia is highly volatile, DCA can be a smart way to manage risk while still building a position over time.
Final thoughts: Why DCA is a smart strategy for Canadians investing in Nvidia
Dollar-cost averaging is a great way for Canadian investors to buy Nvidia without worrying about short-term price swings or currency fluctuations. By investing consistently over time, you lower the risk of making poor timing decisions while benefiting from long-term market growth.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
