What Is Dollar-Cost Averaging and How Does It Tame Volatility?

Why shouldn’t market swings trigger MPF strategy changes?

MPF is long-term investing, and fixed monthly contributions create a dollar-cost-averaging effect that naturally cushions short-term volatility. An MPFA column explained: unless retirement is near, short-term economic wobbles shouldn’t derail long-run plans. Unlike short-term stock trading, long-horizon MPF investing should ride out temporary swings and achieve capital growth.

How does dollar-cost averaging work?

With HK$1,000 a month, rising unit prices buy fewer units while falling prices buy more; over time the average purchase price smooths out. Buying more units cheap in downturns lowers average cost, so the accumulated units deliver handsome returns when markets recover. Compare funds’ long-run records at MPF fund comparison.

Where to ask questions?

The MPFA hotline: 2918 0102. And don’t switch frequently on short-term moves — you’ll bleed fees and miss rebounds.