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Taking into account that there are no transactional fees
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Aidan Neo
17 Sep 2020
Financial Services Consultant at Manulife Financial Advisers
In this case, I'm hoping you mean $100 every 2 weeks and $200 every 4 weeks for fair comparison.
DCA at a higher frequency helps in a volatile-sensitive environment in terms of capturing opportunities.
However, in a general upwards trend, DCA at a lower frequency or lump sum will perform better.
Either way makes sense as long as it is suitable for your risk appetite; no right or wrong.
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The reason to DCA monthly is because most people get paid on a monthly basis. Markets, in general, trend upwards. Therefore, if you are holding on to half of your monthly investment by splitting your investments in two, half of it spends less time in the market.
As far as I am aware, there hasn’t been any substantial evidence to show that DCA works better at 2 week intervals compared to once a month. Thus it’s probably more optimal, and easier, to just do it once a month and forget about it.