DCA: investing the same amount every month

DCA: the strategy most people are already doing without knowing it

Dollar-cost averaging (DCA) means investing a fixed amount on a fixed date, regardless of what the market is doing.

If you set up a £50/month recurring investment, you're doing DCA. Every month, you buy however many ISWD units £50 buys. Sometimes the price is high and you buy fewer. Sometimes it's low and you buy more. Over time, your average purchase price smooths out.

Why it works mechanically

Fixed investment amount + varying share price = varying number of units purchased.

When the price drops, your £50 buys more units. When it rises, it buys fewer. This means you naturally accumulate more of your investment at lower prices. It's not magic: it's arithmetic. And it means you never have to time the market.

A concrete example with ISWD

You invest £50/month over 12 months. Here's how a year with market movement might look:

Month	ISWD price	Units bought
Jan	£6.50	7.69
Feb	£6.20	8.06
Mar	£5.80	8.62
Apr	£5.90	8.47
May	£6.10	8.20
Jun	£6.40	7.81
Jul	£6.70	7.46
Aug	£7.00	7.14
Sep	£6.90	7.25
Oct	£7.10	7.04
Nov	£7.30	6.85
Dec	£7.50	6.67

You invested £600. You bought 91.26 units. Average price paid: £6.57/unit. Final value (at Dec price of £7.50): £684.45.

Notice: you bought the most units in March when prices were lowest. You bought the fewest in November and December when prices were highest. You did that automatically, without thinking about it.

Split your monthly buy in two

Instead of investing once a month, invest on two dates, say the 1st and the 15th. Half your monthly amount each time.

This reduces the impact of any single day's price. If there's a spike or a crash on your usual date, you only catch half of it. Small benefit, zero extra effort.

Double DCA: doubling your contribution when markets fall

When markets fall 15-20% from their recent high, some long-term investors temporarily double their usual monthly contribution to buy more units while prices are low. Because you're acting on a pre-set rule (a specific fall triggers it), not a gut feeling, it stays disciplined rather than market timing.

A worked example

Say you normally invest £100/month into ISWD at £6.50/unit. ISWD then falls 18% from its recent high to £5.33/unit. For that month, instead of your usual £100, you invest £200: your regular £100, plus another £100 you'd set aside specifically for a moment like this.

	Price	Amount invested	Units bought
Normal month	£6.50	£100	15.38
After an 18% drop, doubled	£5.33	£200	37.52

You invested twice as much and came away with more than double the units, because the price was lower. That's the entire point.

The guardrails

• Only use money you've already earmarked for investing and won't need for 5 years or more. Never fund it with debt or your emergency fund.
• Decide the trigger in advance, for example "if ISWD falls 15-20% from its recent high, I'll double my contribution for that month." A rule set ahead of time is discipline. A decision made in the moment, when prices are falling and everyone's anxious, is usually something else.
• Once you've deployed the extra amount you set aside, return to your normal monthly contribution. This isn't a permanently higher direct debit, just a temporary top-up.
• It's entirely optional. Plain monthly DCA, on its own, is a completely sound strategy without it.

When to stop DCA

Never, while you're still building wealth. DCA is the mechanism by which long-term investors accumulate. The only time to change strategy is if your timeline or goal changes, for example moving from accumulation to income drawdown in retirement.

For the vast majority of people reading this, DCA for as long as you can is the correct strategy.