Dollar cost averaging is a lazy man method to invest. The idea of this monthly small amount investment is for those people whom do not have lump sum to invest and build up their lump sum.The idea of this way of investing is to get a low average cost for the unit they buy. So timing of entry is important but is never significant.
If the market were to move side ways or up trend for years, you will make money for sure. If the market go down for years, of course you will lose money.However these are idea conditions, in actual fact market move up, sideways, down in all sort of combination. So to lost money in the market is only that the fund that you invest go down for yearsssss. But on the other hand, if the funds go down for months and it just take a little up for you to have profit. As you are investing a fix amount in a fix time period, so when the market is high, you will buy lesser units and when the market is low, you will buy more units which make the average cost per unit to go low. Thus a slight up move will be profitable. By now, i think you should know that the more volatile the fund movement, the more profitable you will get.
This method help to build up lump sum for individual, and you are investing in a diverse portfolio and at the same time a very low risk approach to investment.
