Dollar (or "Ringgit") Cost Averaging strategy

Once, the market keeps going down, another time an upward trend; then it goes down again.
In an uncertainty market like current situation, I definitely agree that the best option is to go for "Dollar Cost Averaging" in investments.

According to Wikipedia,
Dollar Cost Averaging is a timing stratagy of investing equal dollar amounts regularly and periodically over specific time periods (such as $100 monthly) in a particular investment or portfolio. The point of this is to lower the total average cost per share of the investment, giving the investor a lower overall cost for the shares purchased over time.

Let's talk about how it works in Unit Trusts (Mutual Fund) investments.

In Unit Trusts, the key is to LOWER the AVERAGE COST per unit of a fund.
That is also 1 of the secrets to investing successfully. Why? Because, nobody can TIME the market! Remember i wrote in my previous post, that "timing" and "choosing the right fund" is 2 most important element? Well, this dollar cost averaging strategy definitely can LOWER the risk of "timing" the market. Because we can never always predict accurately whether the market will rise or decline. I find this strategy very useful to be a successful investor.

This strategy is the opposite of "lump sum" investment. Let's say you want to put aside RM5,000 to invest. By using dollar cost averaging, you may invest RM500 per time (eg per month), investing for a total of 10 times to reach RM5,000; rather than investing a one lump sum of RM5,000. UNLESS you are 100% sure that the market is at its LOWEST point, then please invest as much as you can, you'll 100% earn unlimited profit! But the problem is, how can you be 100% sure as we are not God?

Let me give you a simple illustration. Let's say you work in a retail shop selling pens. Supplier A offers you RM0.40 per pen. You buy it - cos you do not know whether the price will increase or decrease in future. You handed RM40 to Supplier A, giving you a total of 100 pens. However, if Supplier B comes into the picture, offering you only RM0.20 per pen, of course you buy from Supplier B now. Thus, the same RM40 you handed over to Supplier B, B gives you a total of 200 pens! Now you have 300 pens altogether, costing you RM80; meaning, the cost per pen = RM80/300 = RM0.267.

Now you may think why don't you buy MORE from Supplier B. Yes sure you can. So you buy RM80 instead of only RM40 from B. Now B gives you 400 pens. So, plus the pens from Supplier A of 100 pens, now your total pens = 500 pens. Cost per 500 pens (costing RM40 from Supplier A and RM80 from Supplier B) is RM120/500 pens = RM0.24 per pen! Now this is the whole idea of Dollar Cost Averaging.

Combining the Power of Dollar Cost Averaging with the Diversification of a Mutual Fund - Any better investment tool ?