What Is Dollar-Cost Averaging?

Instead of trying to guess the “perfect moment” to invest, you just pick an amount — say £200 — and invest it every month, no matter what the market is doing.

That’s it. No timing. No stress. Just consistency.

Maybe you’re putting that £200 into something like VWRL or IWDA. Some months prices will be up. Other times they’ll be down. But that’s the beauty of it.

Why it works

DCA removes emotion from your investing — and that’s huge.

• You’re not panic buying when markets surge or panic selling when they dip.

• When prices fall, your money actually buys more — which boosts long-term returns.

• When prices rise, you buy fewer units… but your earlier investments grow in value.

So over time, your average cost evens out — and often ends up lower than if you’d gone all-in during a volatile period.

When DCA makes sense

If you’re investing monthly from your salary — which I imagine you might be — DCA fits naturally. It’s perfect for long-term goals like:

✅ Retirement
✅ Buying your future home
✅ Or just building wealth in the background

Honestly, it’s not just about performance — it’s about habit. And that’s what makes compounding work for you, not against you.

When DCA isn’t ideal

Let’s say you’ve got a big lump sum sitting in your account — from a bonus, an inheritance, or savings.
In that case, statistically, investing it all at once tends to perform better long-term.

But if you feel anxious about jumping in with a big sum — especially if the market’s choppy — then DCA can still help you ease in gradually over a few months.

There’s no right or wrong here — it’s more about how you feel and what helps you actually take action.

Final thought

Look — DCA isn’t exciting. You won’t see headlines about it.
But that’s kind of the point.

It’s not flashy. It’s not about timing. It’s just about showing up — again and again — and letting time and consistency do the heavy lifting.

If you’re just getting started or want to stay grounded through market ups and downs, DCA is one of the easiest ways to stay invested and stay calm.

You don’t need to do anything complicated — just keep going.