The unit trust sales in Malaysia is meeting new height every year. Thanks to the awareness of the public and also the hardworking sales force.

For investor of unit trust, Ringgit Cost Averaging (RCA) is a common term. It means investing regularly with a fixed amount of money periodically for long term.

The advantages of this strategy are simply:
1. buy more when it is cheap
2. buy less when it is expensive
3. not much to worry about timing the Mr. Market

Even if you invest in share directly, you can also apply the Ringgit Cost Averaging strategy.


Personal finance author and trainer

    22 replies to "Ringgit or Dollar Cost Averaging"

    • Dave

      Hi KCLAu
      The links are not working anymore, please reload

      • KCLau

        Hi Dave, thanks for informing.
        I have to delete the links since the pages had been removed.

    • KL

      Hi KC,
      Is it a good idea to perform RCA with REIT as well?

      • KCLau

        It is applicable in stock investment too.

    • […] Ringgit or Dollar Cost Averaging […]

    • […] If you had invested in unit trust or mutual funds, I am sure that you had heard of Dollar-Cost Averaging (DCA). Another strategy not commonly used in unit trust investment is Value-Cost Averaging (VCA). For […]

    • […] Ringgit or Dollar Cost Averaging […]

    • […] 1. Ringgit Cost Averaging […]

    • noob

      The costly myth of dollar cost averaging….

      now i know i’m not the only person that feel something fishy with DCA…anyhow, investing is better than not investing…

      i’m not good at timing market…but i got a general rule of thumb from another investor…works for me…
      *Jan – high price
      *Feb / Mac – low price
      *April / Mei – high price
      *Sept / Oct – low price

      what’s your opinion, KC?

      • KCLau

        Hi Noob,

        Thanks for pointing to that article. There is always pros and cons in everything.
        The most value I can think of about DCA is that it is a system that works.
        Imagine without doing that, we will be pretty much doing all the investment manually. People just lack the discipline and time to initiate every savings, not mentioning all the emotions involved when we are constantly react to the financial market.

        • Abu Adilah

          Hi KClau,
          I completely agree with you that people lack the discipline to save money and too emotional with the ups and downs of the financial market. Unfortunately even though DCA works, it doesn’t work well, just because buying when price is still moving down can’t be good. There is a small breed of investors who have the expertise to maneuver the ups and downs of the financial market well. Now that we have free or low cost switching mechanism, it is really possible to combine the best of both worlds. The advantage of disciplined saving with the expertise of market timing. A client can make consistent saving to a money market/bond fund for example, which is generally safe but low return. The agent who is hopefully an expert on market timing can then offer the client his/her opinion on when is the time to switch to equity fund. I see this as a niche area, people who really like to maximize the return should try to look for these kind of agents. They are very rare,unlike many agents (who mean well) they don’t just push you to go into loaded funds all the time to maximize their comission, hopefully they go more for the satisfaction of the clients and long term business relationship with their clients.

    • […] fixed and regular investment. This is about applying the dollar cost averaging strategy. You will definitely win in the long […]

    • […] way to accumulate wealth. And included in the list of lessons is the method that I used, i.e. dollar cost averaging and the recommended ways to choose good stocks and unit […]

    • […] unit trusts (or mutual funds as some may call them) are left alone, and regularly invested on a “dollar cost averaging basis”. This post is only about my investment in individual […]

    • […] If you had invested in unit trust or mutual funds, I am sure that you had heard of Dollar-Cost Averaging (DCA). Another strategy not commonly used in unit trust investment is Value-Cost Averaging (VCA). For […]

    • kclau

      Hi Relax,

      if you invest lump sum, it is riskier than RCA because if the market doesn’t perform as you expected, your return of the year might be lower than RCA.

      Of course, there is no right or wrong. But try not to time the market. Even Warren Buffett never does that.

      The easiest way for passive investor is:
      1. Invest according to your asset allocation all the time
      2. If you have 12K, no need to wait to do RCA, just invest fully according to your asset allocation – e.g. 10% cash, 30% bond, 30% local equity, 30% foreign equity etc.
      3. Keep investing whenever you have money, and according to the asset allocation.
      4. Rebalance your portfolio from time to time, maybe once a year.

      Then you will be doing lump sum investment plus the benefit of RCA because you do it regularly.


    • Relax

      one question.

      if I have 12k RM

      If I use RCA, I put 1k per month and I might benefit from the pricing.

      If I put 12k a lump sum as initial capital, I will get the benefit of full year return for my 12k.

      Both seems to be beneficial strategy, but which one is the better choice?

    • […] investment fund to lock the capital gain5. pay monthly or quarterly, instead of yearly to apply the Ringgit Cost Averaging […]

    • […] Ringgit cost averaging strategy– pay monthly or quarterly premium to take advantage of the ringgit cost averaging strategy. As usual, insurance companies charge additional 5% of insurance charges for monthly mode of payment. But it is still worthy to do so when you take into account the time value of money. […]

    • […] Ringgit or Dollar Cost Averaging […]

    • […] Ringgit or Dollar Cost Averaging […]

    • […] renews his policy. A unit trust agent will get residual income for his clients who practice Ringgit or Dollar Cost Averaging. If you are serious to know more, contact me for more details. Some basic requirements […]

Leave a Reply

Your email address will not be published.