Chapter 12

Invest Monthly (DCA)

Watering can pouring coins onto a row of growing plants — regular investing nurtures growth

Investing the same amount every month has a name: Dollar-Cost Averaging, or DCA.

It sounds fancy, but it's the simplest strategy in the world.

How it works

You invest the same amount every month, no matter what the market is doing.

  • Some months you buy when prices are high
  • Some months you buy when prices are low
  • Over time, it evens out

You don't try to guess the right moment. You just keep buying.

Chart showing how DCA lets you buy more shares when prices drop and fewer when prices rise, averaging your cost over time

Why this works

Markets bounce around constantly. Nobody — not even the best investors in the world — can predict when prices will go up or down.

DCA works because you spread your purchases across time. You don't depend on getting lucky with one big buy. You just stay steady.

A famous study by Fidelity found that their best-performing accounts belonged to investors who had forgotten they had an account — or who had passed away. The best investors are the ones who do the least.

The lesson: don't try to time the market. Focus on time IN the market.

Make it automatic

The beauty of DCA is that there's no decision to make each month. Set up an automatic monthly transfer, and investing just happens in the background.

You make your monthly investments and enjoy the beach.

Key takeaway

DCA turns investing into a simple habit. You invest every month, ignore the noise, and let time do the work. But what happens when the market crashes? That's next.