DCA in MSCI World: €20,000 invested at highs yields €9,000 profit

DCA in MSCI World: €20,000 invested at highs yields €9,000 profit

Always buying at the worst possible moment and still making money. That's what a public tracking that started on January 3, 2022, right at the all-time highs of late 2021, and as of October 1, 2026, has accumulated €20,000 contributed and €9,028.89 in gains, a 45.14% return on invested capital. The strategy is almost insultingly simple: €1,000 every quarter, on the first business day of January, April, July, and October, in an MSCI World index fund without currency hedging. No technical analysis, no crystal balls, no looking at the chart. Four years later, the annualized return stands at 14.43%.

The experiment has a virtue that almost no one acknowledges out loud: it is born defeated. The first contribution enters at €39.394 per share, the highest price until then. Anyone who has trinc the plan has seen 30% drops, tariff wars, runaway inflation, and negative real rates. And yet, the result is there.

What is DCA and why it wins even when buying expensive

Dollar cost averaging consists of investing a fixed amount at regular intervals, no matter what. It's not about hitting the market bottom, but about buying more shares when the price falls and fewer when it rises. The tracking proves this with numbers: in July 2022, with the fund at €34.452, the €1,000 contribution bought 29.0260 shares. In October 2026, with the fund at €64.354, the same amount bought 15.5390. Almost half.

That asymmetry explains why the average price of accumulated shares is €44.3379, well below the current price. Anyone who has religiously contributed every quarter has bought cheaper than the market sells today, without making a single forecast.

Some argue that DCA is a waste of time and that statistically it's better to invest everything at once. The argument has merit: two out of three times, the market goes up. But DCA is not a maximization strategy, it's a psychological sustainability strategy. It allows you to sleep at night and not abandon at the worst moment, which is what ruins most people.

The first contribution, the worst of all, already gains 63%

The most striking detail of the tracking is the fate of the first purchase, the one made on the worst possible day. That initial €1,000, converted into 25.3846 shares at €39.394, is worth €1,633 today. A 63% return for the contribution everyone would have avoided.

The pattern repeats in the 2022 contributions, all bought with the market in free fall. Those from April, July, and October of that year accumulate returns above 50%. Meanwhile, the 2025 and 2026 contributions, made with the market already soaring, barely hover around 20% or 15%. The conclusion is uncomfortable: money invested when the world is sinking is the one that gives the highest return.

The problem is that no one knows when the world is sinking until it has already peine. In March 2020, with the S&P 500 plummeting, many investors sold. In 2022, with the fund falling 30%, many stopped contributing. The tracking does not judge those decisions, but the numbers portray them.

The accumulation fund and taxation: paying only on capital gains

One of the advantages highlighted in the tracking is the use of an accumulation fund instead of a distribution fund. Dividends from the index companies are automatically reinvested, without going through the tax authorities. When the investor wants to cash out, they will sell shares and pay taxes only on the capital gains generated, not on the full dividend.

This is a relevant difference for those in the accumulation phase. A distribution fund forces you to declare dividends every year, even if reinvested. The accumulation fund allows you to decide when the gain is realized and, therefore, when taxes are paid. Over a horizon of decades, that tax deferral can miccionan several percentage points of additional return.

The choice of vehicle also matters. The tracking fund, a Vanguard Global Stock Index, is available at brokers like Renta 4 or MyInvestor, with custody fees around 0.19% annually. In traditional banking, fees can exceed 2% annually, which literally eats up the return. The difference between paying 0.19% and paying 2% over a 30-year horizon is abysmal.

The real risk: not the fall, but selling in the fall

The tracking insists on an idea that many investors ignore: the danger is not that the market falls, but that the investor sells when it falls. Index products are passive, but those who buy and sell based on market swings are doing active management, and probably worse than a professional manager.

The warning is repeated: if you can't psychologically withstand a 30% drop, better not invest in equities. DCA does not eliminate risk, it distributes it. And the hardest part is not buying, it's not selling.

Some point out that indexing could become a bubble if too much money ends up in the same funds. The counterargument is that index funds replicate the market average, so talking about a bubble in indexing is talking about a bubble in the stock market, something that would affect active managers equally. If indexing generates inefficiencies, operators willing to exploit them will appear. The market regulates itself, albeit slowly.

The printer argument: why cash always loses

One of the most repeated ideas in the tracking is that holding cash long-term is the worst possible investment. With negative real rates—inflation above official rates—idle savings lose purchasing power every year. Anyone with €50,000 in a checking account for a decade, with an average inflation of 3%, will have lost more than €15,000 in purchasing power.

The argument is reinforced by the context of public debt: states issue money to finance themselves, and that money dilutes the value of cash. It's not a conspiracy theory, it's arithmetic. The money supply grows every year, and those who don't invest fall behind.

The conclusion of the tracking is clear: cash is the riskiest asset in the long term. Not because it will go bankrupt, but because it guarantees losing purchasing power. Equities, with all their volatility, are the only asset that has historically beaten inflation sustainably.

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As of October 1, 2026, the tracking has accumulated €20,000 invested and €29,028.89 in value. The annualized return of 14.43% is extraordinary, probably unsustainable over the very long term. But the experiment is not about that. It's about demonstrating that a simple plan, executed with discipline and without looking at the noise, works. Or at least, it has worked so far.