Is Everything You Learned About Investing False?

I don’t know about you, but I feel like every day leaves me with a feeling of whiplash when it comes to the financial markets. When I first starting writing about finance during the COVID pandemic, I would really look forward to scanning the Wall Street Journal for interesting headlines to share with readers and followers. Lately, I’ve been trying to avoid the news, because it seems like there’s always something grim.

However, I try to remind myself that there are lessons in the madness. This week’s discussion on dollar-cost averaging (below) seemed particularly pertinent. I learned something new, and hope that you do, too.

📝 My Latest Written Pieces: The New Female Consumer

My two latest pieces Forbes pieces are in keeping with March’s women’s focus. I highlight how fintechs can use design to attract more female consumers and shine a spotlight on global fintechs that are successfully closing the gender wealth gap.

🎙️ On the Podcast: Lessons on Resilience

• Latest Episode: I sat down with Ehis Akhetuamhen. During our recording, Ehis shared that his father passed away Ehis was a young boy. I was surprised to learn his, as I have known Ehis for several years now. He shared that this was one of the rare times he has shared this story. I’ve been airing Money Memories for 5 years. The number of “whoa” moments continues to grow with each guest. Listen to our powerful discussion here.

• Upcoming: The next episode of Money Memories will air on March 26. I’ll be speaking with the Student Loan Sherpa himself, Michael Lux. If you have student loans but always felt nervous or anxious about how to approach them, this episode is for you.

💡 On Dollar Cost Averaging During Recessions

Dollar-cost averaging (DCA for short) is the gospel truth for many investors. With dollar-cost averaging, an investor consistently invests a fixed amount at regular intervals—such as the first of each month. This approach results in buying more shares when prices are low and fewer when they are high. Over time, this strategy can help reduce the average cost per share, assuming investments align with market fluctuations. It is tried and tested, and easy to apply. Countless studies have shown that investors who maintain this strategy outperform active stock selection.

But what if I told you this isn’t the full story?

The Wall Street Journal had an interesting little piece comparing DCA against a fixed-cost approach. If you hadn’t heard of this, it’s alright - I hadn’t either. In a fixed-cost investment strategy, you simply purchase a fixed number or percentage of the S&P, rather than deploying the standard dollar sum of DCA.

Interestingly, the WSJ found that fixed-cost investing in recessions slightly outperformed DCA. Here’s the proof:

The markets are moving in crazy ways. Here’s three things to consider if you’re interested in giving fixed-cost investing a chance:

✅ Turn Volatility Into an Advantage – When prices drop, your fixed investment buys more shares, lowering your average cost and setting you up for stronger gains when markets recover.

✅ Remove the Guesswork – Emotional investing leads to costly mistakes. Fixed cost investing keeps you disciplined, eliminating the stress of trying to predict market movements.

✅ Stay in the Market, Reap the Rewards – Missing just a few big recovery days can seriously hurt returns. A steady investment approach keeps you positioned for long-term growth.

🔗 Other Interesting Reads & Listens

📌 There are Places You Cannot Go - You may not know this about me, but I love long reads. This one, in particular, is both devastating and beautiful, and challenges us all to remember what “home” means.
📌 How Missy Elliott & Timbaland Freaked the World – Switched On Pop is another one of my favorite podcasts, and this episode on Timbaland’s timeless sounds did not miss.

Until next time,

Ilona