WALL STREET × GAME DAY
What is dollar cost averaging? Dollar cost averaging (DCA) means investing a fixed amount of money at regular intervals — for example, £200 every month — regardless of whether the market is up or down. When prices are high you automatically buy fewer shares. When prices are low you buy more. Over time this averages out your cost per share.
Imagine you commit to spending £200 per month on tickets to watch your team, regardless of their form. In a winning run, tickets are expensive — you get fewer games. In a bad run, tickets are cheap — you get more games. Over a full season, you've paid an average price that neither the best nor worst days could have achieved with a single purchase.
The same principle applies to stock investing. Markets will have good months and bad months. DCA removes the impossible challenge of predicting which is which.
| MONTH | INVESTED | PRICE PER SHARE | SHARES BOUGHT |
|---|---|---|---|
| January | £200 | £100 | 2.0 |
| February | £200 | £80 | 2.5 |
| March | £200 | £60 | 3.3 |
| April | £200 | £90 | 2.2 |
| Total | £800 | Average: £82.5 | 10.0 shares |
The investor bought 10 shares for £800 — an average of £80 per share. If they had invested all £800 in January at £100, they would have only 8 shares.
Research shows lump sum investing outperforms DCA approximately 66% of the time over 10-year periods (because markets rise more than they fall). However, DCA outperforms in volatile or declining markets, and crucially — it eliminates the psychological challenge of timing a large investment. For most people with regular income, DCA is the natural and psychologically sustainable approach.
Educational purposes only. MarketMVP OVR scores, tiers, and athlete comparisons are proprietary educational tools — not financial advice, investment ratings, or recommendations to buy or sell any security. Always conduct your own research. Full disclaimer