Have you ever wondered whether you should be investing your money daily, weekly, or monthly? I definitely have! After years of managing my own investments and helping clients with theirs, I’ve learned that investment frequency can have surprising effects on your long-term returns.
Today, I’m gonna break down the big question is it better to invest daily, weekly, or monthly? Let’s dive in and find out which strategy actually wins.
Why Investment Frequency Matters (Or Does It?)
When I first started investing around 2015, I was obsessed with timing the market. I’d check stock prices constantly, trying to find the “perfect moment” to invest my hard-earned cash. Sound familiar?
But as I gained experience, I realized something crucial time in the market beats timing the market. This old investing adage has proven true time and again
Still, the question remains – if we’re not trying to time the market but instead investing regularly (known as dollar-cost averaging), does the frequency of our investments actually matter? Should we be putting money in daily, weekly, or monthly?
The Common Wisdom
Most financial advisors will tell you:
- Invest as soon as you have the money
- Automate your investments
- Stay consistent with your strategy
But they rarely specify whether daily, weekly, or monthly investments are optimal. I wanted concrete answers backed by data, not just general advice.
The Real-World Experiment
I recently came across a fascinating analysis by developer Auryn Engel who tackled this exact question. He conducted a data-driven experiment comparing weekly vs. monthly investment strategies using 10 years of MSCI World data (from 2012 onward).
Let me share what he discovered and add my own insights to give you the complete picture.
Comparing Investment Strategies: The Results
First Approach: Weekly vs Monthly (Different Annual Totals)
In the first comparison, Engel looked at:
- Person A: Investing $1,000 monthly ($12,000/year)
- Person B: Investing $250 weekly ($13,000/year)
The result? Weekly investing won by 7.89%.
But wait – this isn’t really fair! The weekly investor was putting in $1,000 more each year. Of course they’d come out ahead.
Second Approach: Same Total Investment (Different Timing)
In the next test, both investors put in the same total amount over 10 years, but the weekly investor started earlier:
The result? Weekly investing still won, but by a smaller margin – 1.87%.
This makes sense because the weekly investor had some money in the market earlier, and as we know, time in the market matters.
Third Approach: Truly Equal (Same Annual Amount, Different Frequency)
Finally, Engel ran the fairest test:
- Monthly investor: $1,084/month ($13,008/year)
- Weekly investor: $250/week ($13,000/year)
The result? Practically identical! The difference was just 0.08% over 10 years – essentially negligible.
What About Daily Investments?
While Engel’s study focused on weekly vs. monthly investing, let’s consider daily investments too.
If we follow the logic from the experiment, investing daily rather than weekly would likely show similarly negligible differences – assuming the total annual investment remains the same.
Daily investing would theoretically put your money to work marginally sooner, but the administrative hassle might not be worth the microscopically small advantage.
The Hidden Factors to Consider
Beyond raw returns, there are practical considerations when choosing your investment frequency:
1. Transaction Costs
- Broker Fees: Some platforms charge per transaction. More frequent investments could mean more fees.
- Free Trades: Many modern brokers offer commission-free trades, eliminating this concern.
2. Psychological Benefits
- Less Stress: Monthly investing might mean checking your portfolio less often, reducing anxiety.
- Automation Satisfaction: Weekly investments can provide more frequent dopamine hits of “I’m doing something good for my future.”
3. Administrative Burden
- Tax Documentation: More transactions = more paperwork at tax time.
- Time Management: Daily investing requires more attention and potential decisions.
4. Market Volatility Exposure
- Higher Frequency: More entry points may smooth out volatility effects.
- Lower Frequency: Fewer chances of investing at market highs or lows.
The Impact of Investment Amount
Something we haven’t discussed yet is how the size of your investments might influence the optimal frequency.
If you’re investing smaller amounts (say, under $100 at a time), transaction costs or minimum investment requirements might make higher frequency impractical.
For larger sums, the “time in market” advantage of higher frequency investing might be more meaningful in absolute dollar terms.
My Personal Strategy
After all this research and my own experience, I’ve settled on a bi-weekly investment schedule that aligns with my paychecks. This works for me because:
- It’s easy to automate
- It provides enough frequency to smooth out some market volatility
- It doesn’t overwhelm me with constant financial decisions
Investment Frequency Strategies by Investor Type
| Investor Type | Recommended Frequency | Why It Works |
|---|---|---|
| Beginner | Monthly | Simplicity, lower psychological burden |
| Intermediate | Bi-weekly/Weekly | Balance between time in market and management |
| Advanced | Weekly or tailored | Optimized for specific financial situations |
| High-Income | As income arrives | Maximizes time in market, minimizes cash drag |
Key Takeaways: What Really Matters
After analyzing all this data, here’s what actually matters:
- Total Amount: How much you invest is far more important than how often
- Consistency: Regular investing beats sporadic investing
- Time Horizon: The longer your money stays invested, the less frequency matters
- Convenience: Choose a schedule you can easily maintain
Practical Implementation Tips
Ready to optimize your investment frequency? Here’s how to get started:
- Audit your current strategy: Review your existing investment pattern
- Calculate your annual total: Make sure you know your yearly investment amount
- Check for fees: Ensure your broker doesn’t charge per transaction
- Automate: Set up automatic transfers at your chosen frequency
- Review annually: Adjust as your financial situation changes
Common Questions About Investment Frequency
Is daily investing worth the hassle?
For most people, probably not. The marginal benefits are likely outweighed by the administrative burden.
What if I get paid irregularly?
Consider setting aside money in a high-yield savings account, then investing on a regular schedule regardless of when you get paid.
Does investment frequency matter more during market volatility?
Theoretically, higher frequency during volatile periods could help you catch more dips, but predicting volatility is notoriously difficult.
Should I adjust my frequency based on market conditions?
I’d advise against it. Trying to time the market by adjusting frequency is just another form of market timing, which rarely works for retail investors.
The Bottom Line
So, is it better to invest daily, weekly, or monthly? The data suggests that as long as your total annual investment remains the same, the frequency makes almost no difference to your returns.
What DOES matter is:
- Starting early
- Investing consistently
- Minimizing fees
- Staying invested long-term
Choose the investment frequency that best fits your lifestyle, income pattern, and psychological preferences. The best strategy is the one you’ll actually stick with.
I’ve personally found that simpler is often better. Don’t overcomplicate what should be a straightforward process. Pick a frequency, automate it, and focus your energy on increasing your income or finding other ways to boost your investment total.
What’s your current investment frequency? Have you tried different approaches? I’d love to hear your experiences in the comments below!
Now for some basic math:
Dale and Dean invest $4,900 per month or $1,225 per week. They ran their numbers through Sorted and chose returns of 10%* but didn’t consider inflation or tax. The difference between investing weekly instead of monthly was significant; an $86,156 difference!
*They felt comfortable choosing 10% because the Sharesight Share Checker shows that had they invested $10,000 ten years ago in the: US 500 (USF), the total return would have been 11.66% NZ 50 (FNZ), the total return would have been 11.79% ASX 200 (AUS), the total return would have been 13.22% Total World Fund (TWF), the total return would have been 7.71%
Weekly vs Monthly Investing?
Today I’m sharing a practical example of why it might be worth investing weekly instead of monthly and moving from Smartshares to InvestNow to enable that.
I’ve met many lovely people via my blog, few more lovely than Dale and Dean. We have been emailing back and forth for three years, and they recently let me know of a significant change they have made to how they invest. With their permission, they have let me share it.
They are self-employed (they work together), have low business expenses, and keep a tight reign on their business cash flow. They invoice weekly, earning them a good income and keeping cash flowing into their business and personal bank accounts. They have been investing monthly with Smartshares, and every six months or so, scrape any surplus out of their business and invest that as a lump sum.
They have been consistently investing in four Smartshares ETF funds: US 500 (USF) NZ 50 (FNZ) ASX 200 (AUS) Total World Fund (TWF)
I specifically put them on the spot and asked them to share their numbers because I think it is helpful for others to see that it is normal to aim to have large sums of money invested in the share market. We are used to seeing house prices of $1,000,000 and feeling this is perfectly normal. I want others to feel the same about seeing high numbers in the share markets too.
Their investments outside of KiwiSaver now total ~$475,000. Their total investments, including their KiwiSavers, are ~$690,000. They are long-term investors, knowing that money needs to be left alone for ten years plus before they might start to draw on it for early retirement.
They aggressively paid off their house, were debt free by age 50 and have since invested HARD for retirement and life. I interviewed them on podcast episode 33. A Debt Free Birthday. Dean said that despite being tempted, they had resisted the urge to keep tweaking these investments and have persisted with monthly investing. They have now been investors long enough to feel little worry or concern when they see returns dropping or the market being generally quite volatile as it has been these last couple of years. If anything, they see this as the opportunity to buy shares more cheaply.