Investing every week: the dollar-cost averaging method
What investing a fixed amount frequently (dollar-cost averaging) means, an example with numbers, why it avoids trying to time the market and how Viernes de Invertir applies it.
2 min read · Jorge Avila Meléndez
Investing a similar amount every week, whether the market is up or down, is known as dollar-cost averaging (DCA). It is the foundation of Viernes de Invertir: about 500 pesos every week, for 52 weeks, to build one portfolio per year.
How it works with numbers
Imagine you invest 500 three weeks in a row in the same stock:
| Week | Price | Shares you buy with 500 |
|---|---|---|
| 1 | 10 | 50 |
| 2 | 8 | 62.5 |
| 3 | 12.50 | 40 |
| Total | 152.5 shares for 1,500 |
Your average cost is 1,500 ÷ 152.5 = 9.84 per share, even though the average price over those weeks was 10.17. When the price falls, the same amount buys more shares; when it rises, it buys fewer. Without doing anything special, you end up buying more when it is cheap.
Why it works for most people
- You do not need to guess the market. Nobody knows for sure whether it goes up or down tomorrow. DCA takes that pressure off.
- It turns drops into opportunities. If the market falls, your next purchase gets more shares. That changes how you feel about drops.
- It builds a habit. Like exercise, the hard part is not one day, it is consistency. A small purchase every week is easy to sustain.
- It fits your income. You can start small and raise the amount when you can.
How Viernes de Invertir applies it
- One purchase every week of about 500 pesos; Friday is just the name of the habit. If the market is closed that day, the purchase is made earlier or on the next business day. See stock market hours.
- Whole shares. On the SIC you usually buy whole shares, so the week's amount is adjusted to buy a whole number close to the target.
- Building positions little by little. Each company is bought over several weeks until it reaches a range (for example, 2,000 to 6,000 pesos), then the next one starts. That keeps the portfolio diversified.
- One portfolio per year. After 52 weeks the portfolio is closed and left to grow: contributions stop and the value keeps working with compound interest.
What if I have a large amount at once?
Studies show that, on average, investing everything at once has returned a bit more than spreading it out, because markets rise in more years than they fall. But spreading it reduces regret if a drop comes right after, and for most people money arrives every two weeks or every month, not all at once. What matters is investing consistently.
What matters to get started
- Investing a fixed amount frequently makes you buy more when it is cheap.
- You do not need to guess the best moment.
- Consistency beats amount: start with what you can and do not stop.