For sure, commissions are a factor to consider to calculate when investing. The author of the article does think that DCA is a good idea for small amounts of money like $500. He used MFs but I don’t think the strategy is implicit that it’s only for MFs though. There is a “rule” that the commissions should not be more than %1 of the investment. So if you wish to purchase $500 of stocks, commissions should not exceed $5. I’m not an expert in discount brokerage fees but I pay $7 per trade with a big bank so $5 should be doable with some brokerage shopping.

Thanks for the comment.

I wouldn’t have problems doing a lump sum of 5k – in fact, have done so… and higher on my infamous penny stock buys to avoid commissions. But in this case, we’re talking about mutual funds so no transaction cost involved.

Regardless, 60k is a big hunk of change to invest at once. I’d only do it if I was really into watching the market to time it… It might not make much of a difference to DCA quarterly, or even monthly but I’d be psychologically more comfortable with that.

If you have $5000 in cash to invest in an IRA for instance, go ahead and put it in your IRA in January. Odds are it’ll be worth more at the end of the year than if you made 12 monthly investments. It gives all your money all 12 months to compound. Sure, the market may dip in February (like now), but odds are you’ll still be better off next year by dumping it all in at once.

Of course if you do this every January then it’s technically dollar cost averaging, just on an annual basis instead of monthly.