How often should I dollar cost average and when to do it?

General
1

Hey everyone, I’ve got two questions about dollar cost averaging:

  1. How often do you invest? I’m thinking about splitting my monthly amount into three parts. My thought is that even though commissions might be a bit higher, I’d take better advantage of market ups and downs. Does this make sense?

  2. Do you stick to a set date each month for investing, or do you adjust based on the market? For example, skipping some months or investing more when things look good?

Thanks for your advice!

2

I just invest whenever I have extra money to spare.

3

It really depends on what your goals are and how long you’re planning to invest. But for most people who are investing for retirement in something like broad index funds, the best approach is to invest as much as you can, as soon as you can.

4

I always invest as soon as possible.

My strategy is simple:

  1. Put in as much as I can, as early as I can.
  2. Focus on tax-advantaged accounts early on.

The earlier you invest, the more time your money has to grow. The earlier you put it into tax-advantaged accounts, the more tax savings you gain over time.

Markets are unpredictable, but over the long run, investing early usually pays off. If you don’t believe in the long-term benefits, why invest at all?

5

For many people, it’s automatic through their 401k every paycheck. For me, that was every two weeks, and I just put 100% into the S&P 500 index fund available, which in my case was FXAIX.

6

If there are no fees for your transactions, just invest every time you get paid.

7

Looking back 10 years at the charts, the timing didn’t really matter. When I see how much I’ve grown from where I started, it’s clear the ‘when and how’ was insignificant.

What really matters:

  1. Automate your investments—I set mine to once a month.
  2. Don’t overthink it. Just leave it alone unless absolutely necessary.
  3. Minimize fees.
  4. If you’ve got extra money, invest it. Don’t wait or hesitate.
8

What are you buying, and which broker are you using that’s charging commissions? Are you sure that’s the best option?

The main idea behind dollar cost averaging is to spread your investments over time to smooth out highs and lows. Don’t do anything that increases costs unnecessarily—that goes against the whole point.

9

I invest every week, on Wednesday. No particular reason, just picked a day.

10

Most people just invest on payday. Automate it to make things easy. You can set up direct deposit to go straight to your investment account or schedule a transfer on payday or the next day.

If you’re investing for 5+ years, it really doesn’t matter if you do it weekly or monthly.

11

I invest every day if I notice a good opportunity.