DCA (Dollar Cost Averaging) or not DCA

For those who have ever listened to investment talk from mutual fund/insurance agents will definitely hear about the benefit of DCA - meaning investing a fixed amount of $ in regular (monthly) basis into mutual/investment linked fund.

As most will find it a compelling reason to practice DCA, some savvy clients would want to find out more (especially the disadvantages of it) about DCA before making their decision.....of course that's your right to do so since its your money!

I happened to stumble across this article about the disadvantages of DCA as I prowled thru the web , and can't help to give my views about it....

1) There is no doubt that regular investment does not work as good as lump sum investment when the market is up constantly - meaning your regular investment would grab lesser units as the fund price keeps going up. However, as we know such market does not exist in any part of the world.

2) Investing randomly will sure give you a better return if you can monitor your fund price and share market everyday, yet have the time to drop by at bank any day to top up your investment when price falls.......sadly, as we know even house wife don't have time to do it these days!!

3) Regular investment guarantees the worst return for investor that can time the market....unfortunately even Warren Buffet can't time the market.

As much as I disagree with the author's views about regular investment, I can't help but agree on one statement in the article - "However you do it, investing is better than not investing."

So happy investing....(especially with me)