Investing can feel overwhelming—especially during volatile market conditions. One proven method to manage risk and build wealth steadily is Dollar-Cost Averaging (DCA). For investors in Malaysia and Singapore, this strategy offers a disciplined, accessible approach to growing your portfolio over time without the pressure of timing the market.
Here’s what you need to know about dollar-cost averaging and how to apply it effectively.
What Is Dollar-Cost Averaging?
Dollar-cost averaging is an investment strategy where you invest a fixed amount of money at regular intervals (e.g., monthly), regardless of market conditions.
Instead of investing a lump sum at once, you spread your investment out over time. This approach allows you to buy more units when prices are low and fewer units when prices are high, potentially lowering your average cost per unit over time.
How It Works – A Simple Example
Let’s say you invest RM1,000 or SGD1,000 monthly into a unit trust, ETF, or stock:
| Month | Price per Unit | Units Purchased |
|---|---|---|
| Jan | RM10 / SGD10 | 100 units |
| Feb | RM8 / SGD8 | 125 units |
| Mar | RM12 / SGD12 | 83.33 units |
| Total | — | 308.33 units |
Total invested = RM3,000 / SGD3,000
Average cost per unit = RM9.73 / SGD9.73
Even though prices fluctuated, your average cost was lower than the highest price paid.
Why DCA Makes Sense for Everyday Investors
✅ Reduces Timing Risk
Trying to “buy low, sell high” consistently is nearly impossible, even for professionals. DCA removes the emotional and psychological pressure of choosing the “right” time to invest.
✅ Promotes Financial Discipline
It encourages consistent investing habits, which are essential for building long-term wealth—especially when automated through standing instructions or GIRO.
✅ Takes Advantage of Market Volatility
Market dips become opportunities to buy more units at a discount, lowering your average cost and improving your long-term returns.
✅ Budget-Friendly
You don’t need large sums to start. With platforms in Malaysia like StashAway, Wahed Invest, or Fundsupermart, and in Singapore like Endowus, Syfe, or FSMOne, you can begin with as little as RM100 or SGD100.
Where to Use Dollar-Cost Averaging
- Unit Trusts / Mutual Funds
- ETFs (Exchange-Traded Funds) like the STI ETF (Singapore) or FBMKLCI ETF (Malaysia)
- Robo-Advisors: Regular investments are built into platforms like Raiz, StashAway, Syfe, and Endowus
- Stocks: Many brokerages now allow fractional or small, regular stock purchases
- PRF / CPFIS / EPF i-Invest: DCA can apply to your retirement investing as well
Things to Keep in Mind
- DCA works best with long-term investment goals.
- It does not eliminate risk—it helps smoothen volatility.
- Avoid over-diversifying; focus on quality assets aligned with your goals.
- Review your portfolio periodically to ensure it stays on track.
Who Should Consider DCA?
- First-time investors afraid of market timing
- Busy professionals who want a hands-off approach
- Young savers looking to build wealth steadily over decades
- Retirement planners contributing to CPF, PRS, or EPF-linked investments
Dollar-cost averaging isn’t a get-rich-quick scheme. Instead, it’s a reliable, research-backed method that emphasizes discipline, consistency, and time in the market over trying to beat the market. Whether you’re in Malaysia or Singapore, DCA can be the foundation of a strong and sustainable investment strategy.
Start small. Stay consistent. Let time and compounding work for you.
