The main pros of dollar-cost averaging are that it builds a steady habit, takes the timing decision out of your hands and softens the damage of investing just before a fall. The main cons are that it usually trails a lump sum when markets rise, it does not protect you from an investment that keeps falling, and fees charged on every purchase can eat a noticeable share of small monthly amounts.
Investing can lose money. This page weighs the trade-offs with our own illustrations. It does not recommend any product.
The Pros of Dollar-Cost Averaging
1. It takes emotion out of the decision. MoneySense says that setting a fixed amount to invest at regular intervals can help to remove emotion from investing, and that a standing monthly instruction lets you invest consistently through good and bad times.
2. You never have to pick the month. You stop trying to time the market. MoneySense puts it as building wealth through time in the market.
3. Your average cost sits below the average price. A fixed sum buys more units when prices are low. Our 12-month dollar-cost averaging example shows an average cost of about $0.891 against an average price of $0.90.
4. It matches how most people get paid. You invest when the salary arrives instead of waiting to build a pile of cash.
5. Smaller worst-case shocks. Because money goes in gradually, a crash in the first few months hits only part of it. Vanguard’s 2023 research found phased investing did better than a lump sum in the worst market periods.
6. Low entry point. Many Singapore regular savings plans start from S$100 a month.
The Cons of Dollar-Cost Averaging
1. It usually trails a lump sum in rising markets. If you already hold the money, keeping it in cash while you feed it in has a cost. Vanguard found a lump sum beat a three-month phase-in about two-thirds of the time on global shares from 1976 to 2022. See DCA vs lump sum.
2. It cannot rescue a poor investment. DCA lowers your average cost relative to the price path. If the price ends below your average cost, you lose money. Buying more of something that keeps falling simply loses more.
3. Fees are charged on every purchase. Twelve purchases a year mean twelve fees. A minimum fee hits small amounts hardest (worked below).
4. It can create false comfort. “I’m averaging down” can become a reason not to check whether a holding still makes sense. MoneySense suggests reviewing your portfolio regularly and rebalancing.
5. Some plans limit what you can buy. Bank and broker plans offer a set list of shares and funds. The list may be narrower than you want.
The short version: dollar-cost averaging is a good habit, not a magic formula. It helps you keep investing through ups and downs, but it does not choose good investments for you, and on small amounts the fee per purchase matters as much as anything else.
Worked Example: How Fees Eat Small Monthly Amounts
Illustration only, not a guarantee. Two fee types you will see on provider pages:
- A $1 minimum (for example “0.08% or $1, whichever is higher”): on small buys, the $1 applies.
- A percentage with no minimum, such as 0.08% on every buy.
At $100 a month:
| $1 minimum | 0.08%, no minimum | |
|---|---|---|
| Fee per purchase | $1.00 | $0.08 |
| Share of each purchase | 1% | 0.08% |
| Fees a year | $12 | $0.96 |
| Fees over 10 years | $120 | about $10 |
Now assume, purely for illustration, that the investment grows 5% a year. After 10 years, $100 a month with no fees would be about $15,528. With the $1 minimum taken off each buy, it is about $15,373, roughly $155 less. With 0.08%, it is about $15,516.
Raise the amount and the $1 minimum shrinks as a share. At $500 a month it is 0.2% of each buy; at $1,000, 0.1%. Our guide to investing $100, $500 or $1,000 a month shows what else changes at each level.
Real fee structures to check
Fee rules differ by plan, so read them on the provider’s own page. Two examples as at November 2026:
- OCBC Blue Chip Investment Plan: 0.3% of the amount or S$5 per counter, whichever is higher, for most customers. On $100 that is $5, or 5% of the purchase. OCBC lists a flat 0.88% with no minimum for new customers under 30, on up to S$500 per counter a month.
- Phillip Securities Share Builders Plan: charges on the portfolio, not each purchase: 0.3% a year of total portfolio value, minimum S$1 a month, with monthly caps. The fee continues while you hold, even if you stop buying.
Fund-level costs come on top. An ETF’s or unit trust’s own expense ratio is deducted inside the fund every year, whatever plan you use. Test your fee in the DCA vs lump sum calculator.
When the Cons Matter Most
- You are sitting on a large sum and would be comfortable with swings: the expected cost of feeding it in slowly is real.
- Your monthly amount is small and the plan has a high minimum fee. Investing every two months, or choosing a plan without a minimum, can change the maths. Check whether a plan lets you change frequency.
- You are buying one or two shares. MoneySense notes that if you invest in a single company’s shares, you may lose all your money if it goes bankrupt. DCA does not diversify for you; a broad fund does. Our ETF investing guide explains how that works.
What To Do Next
- Work out your fee per purchase as a percentage of your monthly amount. Aim to know the number, not just the headline rate.
- Compare plans in our guide to regular savings plans in Singapore.
- Decide what you are buying before how you buy it. Read common dollar-cost averaging mistakes before you start.
- Do your own due diligence: read the product highlights sheet and fee schedule, and check the provider in the MAS Financial Institutions Directory.
