Dollar-cost averaging
What it means
Investing a fixed amount on a regular schedule — say, monthly — instead of trying to time a single "best" moment to invest a lump sum.
Why it matters
It removes the pressure (and the guesswork) of market timing, and it's exactly what an automatic monthly transfer on payday accomplishes without you having to think about it.
A worked example
Invest 2,000 a month for four months while the price moves: 100, 80, 125, 100. You buy 20 units, then 25, then 16, then 20 — 81 units for 8,000, an average cost of about 98.8.
The average of the four prices was 101.25, but your average cost came out lower. That gap is the whole mechanical effect: a fixed amount of money buys more units when the price is low and fewer when it is high, so cheap purchases carry more weight in the final average.
What people get wrong
It gets sold as a way to get better returns than investing a lump sum, and the evidence generally does not support that. If you already have the money and markets rise more often than they fall, investing it all at once has usually done better on average, simply because it spends more time invested.
What dollar-cost averaging actually does is reduce the consequence of terrible timing and make the decision easier to live with. That is a behavioural benefit, not a mathematical one — and it is a perfectly good reason to use it, provided you know which benefit you are buying. For most people investing out of a monthly salary the question is moot: there is no lump sum to deploy.
How this works in Latin America
When the asset is priced in dollars and your income is not, a monthly schedule averages two things at once: the price of the investment and the exchange rate you converted at. In currencies that move sharply, the second can matter as much as the first over a given year.
The practical caution is transaction costs. Fixed per-trade fees and FX spreads take a proportionally larger bite out of small monthly purchases than out of occasional large ones. Before committing to a monthly cadence it is worth calculating what the platform charges per purchase, including the currency conversion margin, as a percentage of the amount you plan to invest — at small amounts that figure is sometimes large enough to change the sensible frequency.