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Jeffrey Lim

31 Aug 2020

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When it comes to DCA, whats the disadvantage of DCA at a longer interval compared to monthly?

I'm planning to start investing via DCA but my monthly contribution now is small. I plan to invest roughly 2.5k every three months to keep costs down. I was deciding between three or four months. I just wanna ask what's the disadvantage in DCA with a longer time interval (ie.monthly vs quarterly vs 4 monthly )

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Aidan Neo

31 Aug 2020

Financial Services Consultant at Manulife Financial Advisers

DCA at a shorter interval will be more price sensitive and allow you to have better chances to capture any lows. However, it has its cons as well if the price continue to trend upwards, you are buying expensive every month.

To put it simply, DCA longer interval will be better for long term upwards trend. DCA monthly will be better for consistently volatile trend.

Apart from there, do consider the cost-effectiveness of your DCA. Put an approach that will minimise any fees and not erode your returns.

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