Understanding DCA and how to choose the right stocks for consistent savers

Nowadays, many people are starting to take an interest in ways to generate additional income through simple investment methods that do not require large capital. One increasingly popular approach is gradual investing using DCA, which is a strategy well-suited for beginners and salaried individuals.

What does DCA mean?

DCA stands for Dollar-Cost Averaging, a method of investing where investors regularly allocate the same amount of money, such as on the 15th of each month or after receiving their salary, to buy stocks or funds they wish to invest in.

The key point of DCA is that it ignores whether the stock price is high or low at that moment, simply assuming that each price is fair. The result is that when prices rise, the same amount of capital buys fewer shares, but when prices fall, it can buy more shares. This approach helps lower the average cost compared to making a lump-sum purchase at the year’s highest price.

Why is it suitable for salaried workers?

People with regular income can plan their savings better by setting aside a portion, such as 1,000-5,000 THB per month, to accumulate future capital. They don’t need to worry about market timing or fear buying at high prices because gradual investing reduces these concerns.

Advantages of using DCA

1. Requires minimal initial investment
Those with limited funds can start with as little as 1,000-2,000 THB per month without affecting their daily expenses.

2. Builds disciplined saving habits
Automatic monthly deductions help investors stay consistent, even if they forget or change their minds.

3. Reduces risk of buying at high prices
Spreading out investments creates an average cost, often lower than the peak prices during that period, due to buying at different prices.

4. No deep market knowledge needed
Even those unfamiliar with market analysis can do it by simply choosing fundamentally strong stocks.

5. Higher returns than bank interest
Over the long term, stock values tend to grow faster than typical deposit interest rates.

Limitations to be aware of

1. The average cost may be higher than the current market price
In the short term, if stocks rise above your average cost, profits may not be as high as expected.

2. Picking the wrong stocks can still lead to losses
Even with DCA, investing in stocks without growth potential or with poor fundamentals can result in losses.

3. Does not reduce market volatility
Investing in highly volatile assets still exposes your portfolio to market fluctuations.

Which stocks should be considered for DCA?

Choosing stocks for DCA should focus on long-term savings goals. Look for:

Strong competitive advantages — Companies with products or services in steady demand.

Growth potential — Businesses in future-proof trends like clean energy, healthcare, or technology.

Consistent profits and dividend payments — Financially strong companies that regularly pay dividends.

Reasonable debt levels — Companies with manageable debt to ensure financial stability.

Increasing retained earnings — Indicating growth and stability.

Example calculation of DCA

Suppose you invest 3,000 THB every month for 12 months, with stock prices fluctuating between 6 and 15 THB:

As seen, the average cost of 9.67 THB is lower than the year-end closing price of 15 THB. If you had invested all 36,000 THB at once, you would have only 2,400 shares, but with DCA, you get 3,940.69 shares—more than 60% extra.

6 stocks suitable for beginners saving regularly

1. PTT (PTT Public Company Limited)
A national energy company with high stability, involved in oil and gas exploration, refining, and distribution. It pays regular dividends, ideal for long-term investment.

2. CPALL (CP All Public Company Limited)
Operator of over 13,000 7-Eleven stores nationwide, with continuous growth and stable income, paying dividends regularly.

3. SCC (Siam Cement Public Company Limited)
A leading ASEAN company with over 100 years of history, involved in cement, chemicals, and packaging, with stability and adaptability to market changes.

4. INTUCH (Intouch Holdings Public Company Limited)
Invests in telecom, IT, and digital businesses, with major holdings in AIS, a leading mobile operator. It has steady cash flow and high dividend payouts.

5. BBL (Bangkok Bank Public Company Limited)
A large commercial bank with extensive branch network, strong business operations, and consistent dividend history.

6. CPN (Central Pattana Public Company Limited)
A leading shopping mall developer with over 30 malls, stable rental income, and ongoing expansion plans.

Financial institutions offering DCA account services

Many financial institutions offer DCA services, each with different conditions:

How to choose the right institution for yourself

If you have limited funds — choose an institution with a low minimum, such as SBI or Phillip, starting at 1,000 THB.

If you want lower fees — SBI offers a commission of only 0.075%, which is competitive.

If you want variety — brokerages with many stock or fund options provide more flexibility.

If you prefer simplicity — some offer recommended stocks from experts, reducing decision complexity.

Tips for successful DCA investing

1. Choose fundamentally strong stocks — study the company’s performance, financials, and future outlook before investing.

2. Set long-term goals — DCA is not for short-term profits; aim to hold for at least 5-10 years.

3. Avoid panic selling during downturns — don’t see falling prices as a signal to stop; keep investing because you’re buying at lower prices.

4. Monitor company performance — even if you don’t check daily, review annual reports to stay informed.

5. Increase investment amount when possible — if you receive extra income or bonuses, consider adding more to accelerate wealth accumulation.

Summary

DCA is a simple investment method suitable for those aiming to build a stable future wealth system. While it may not deliver the highest short-term gains like market timing, consistency and disciplined savings will generate long-term confidence. The key is choosing which DCA stocks to buy based on fundamentals, company stability, and industry growth prospects. When you select wisely and continue purchasing regularly, your wealth-building success increases.