facebookIs it better to DCA weekly or monthly? (Assuming no difference in fee) - Seedly

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Anonymous

Edited 25 Aug 2021

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Stocks

Is it better to DCA weekly or monthly? (Assuming no difference in fee)

DCA weekly or monthly

Discussion (12)

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Depends on the stock volatility.

Billy

26 Aug 2021

Development & Acquisitions Manager at Real Estate Private Equity

Talk is cheap, let the data speak for itself.

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I have did a simulation over a 5-year period, investing 1 unit every week in comparison to 4 units every 4 weeks. And the result is as attached.

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Ngooi Zhi Cheng

26 Aug 2021

Student Ambassador 2020/21 at Seedly

With no difference in fee, DCA weekly smoothens out the volatility, even more, allowing you to have greater peace of mind when investing.

Take note that DCA is often recommended because it is the quickest way to put your money to work, while reducing the need to time your entry into the market.

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https://static.twentyoverten.com/5980d16bbfb1c9...

TLDR of the article, contrary to popular beliefs, Lump Sum actually beats DCA 2/3 of the time.

No different. Assume u have 0 transaction cost.

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Market can move 3 way (see below)

  • Side way- no difference
  • Trend up- u will hate yourself
  • Trend down- will benefit u if you dca weekly.

However, you will not able to predict the market movement. Over long period of time, you will encounter these 3 scenerio often within a month, if u DCA consistently u will get an average return.

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Should not differ with a zero fee broker and DIY DCA, however weekly is a hassle, maybe mathematical...

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