Investing a fixed amount every month: DCA, your mix and rebalancing

Investing a fixed amount on a fixed day each month is the simplest habit in investing. You don't need to guess the right moment, and each payment buys more units when prices are low and fewer when they are high.

When you already hold a large sum and drip it in over months instead, that is called dollar-cost averaging (DCA). Research finds investing it all at once usually ends ahead, but DCA lowers regret if prices fall soon after. This guide shows both, with the EGX's own record.

Two different situations

If you invest part of your salary every month, you are not really choosing DCA. You are investing money as soon as you have it, which is what the research favours anyway. The question only arises when you hold a lump sum.

How averaging works

These numbers are an example. You invest EGP 1,000 a month for four months in a fund whose unit price moves.

Check: 1,000 ÷ 10 = 100, 1,000 ÷ 8 = 125, 1,000 ÷ 5 = 200. You paid EGP 4,000 for 525 units, an average of about EGP 7.62 a unit. The average price over the four months was EGP 8.25. Because a fixed amount buys more when prices are low, your average cost lands below the average price.

At month 4 the price is back at EGP 10, where it started. Your 525 units are worth EGP 5,250: a 31% gain on a market that ended flat. This only works if you keep buying through the fall.

What the research says about lump sums

Vanguard compared investing a lump sum at once with spreading it over time. In its 2023 paper, investing at once beat spreading over three months 68% of the time, measured after one year, in an all-share portfolio. Spreading it out still beat holding cash 69% of the time.

The reason is simple: markets rise more often than they fall, so money waiting in cash usually misses some of the rise. Vanguard's conclusion is that most investors should invest a lump sum at once. DCA may suit people who would be badly shaken by a fall right after investing.

One more point for Egypt: money waiting to be invested can earn interest in a savings account or money-market fund. That narrows the gap with investing at once.

The EGX30's own record, 2021 to 2026

Investment Growth's "what actually happened" view uses real EGX30 index levels. Here, EGP 10,000 goes in each October from 2021 to 2025, and everything is valued on 22 October 2026.

Value on 22 October 2026, at 51,052.26: about EGP 142,254 for EGP 50,000 paid in, a gain of about 185%. Putting all EGP 50,000 in at once in October 2021 would have grown to about EGP 221,838.

Two lessons follow. In a strongly rising market, earlier money does best, as the research predicts. And the pound fell sharply over the same years: in US dollars, the yearly amounts came to about USD 1,788, and the final value to about USD 2,612, using CBE rates for each date. That is a gain of about 46% in dollars.

These figures are the index's price only: no dividends, fees or stamp duty. Five snapshots show one path and don't predict the next five years.

Try it with your numbersInvestment GrowthSee how investing a fixed amount every month could grow your wealth over time.

Deciding your mix

Monthly investing works best with a written plan for where each pound goes. Most people split between three kinds of holding.

How much goes into shares depends mainly on when you will need the money and how you would react to a 30% fall. These mixes are examples to show the idea, not recommendations.

Write your own mix down. A target you set in a calm month is easier to keep in a scary one.

Rebalancing once a year

Over time, the part that rose fastest grows bigger than you planned. Rebalancing means moving money back to your target mix, usually once a year.

These numbers are an example. Your target is 40% shares and 60% certificates. You start with EGP 100,000: EGP 40,000 and EGP 60,000. A year later, shares have risen 50% and the certificates paid 17.75%.

Check: 60,000 × 1.1775 = 70,650, and 130,650 × 0.4 = 52,260. The 17.75% is Banque Misr's three-year fixed certificate rate as of 1 October 2026.

Rebalancing makes you trim what rose and add to what lagged. You can often do it without selling, by pointing the next few monthly payments at the part that is below target.

Doing it in practice

Pick a fixed day, such as the day after payday, and set a reminder or a standing transfer. Our funds vs single shares guide explains fund types, fees and how to check a fund is licensed.

Your plan

1. Settle your base: no expensive debt, and an emergency fund in place.
2. Pick a monthly amount you can keep paying in a bad month, and a fixed day.
3. Write your target mix for shares, certificates and gold, based on when you need the money.
4. Choose how to invest: a fund for simplicity, or shares if you will put in the work.
5. If you hold a lump sum, decide in writing: all at once, or spread over a fixed number of months.
6. Try your numbers in Investment Growth, then check your real results once a year.
7. Rebalance once a year, using new money first.

What to watch out for

• Stopping in a fall. Averaging only helps if you keep buying when prices drop.
• Spreading a lump sum forever. Pick an end date; cash left waiting usually misses gains.
• Fees on small orders. Check the minimum fee per order before buying single shares monthly.
• Pound gains vs real gains. Compare results in today's money or in US dollars, not just in pounds.
• Past returns. The EGX30's rise from 2021 to 2026 doesn't predict the next five years.