Monthly Investment Scheduling for Sustained Growth
Most people know that consistently adding money to the market is a proven way to build wealth. But how exactly should you approach those regular contributions? This post explores how to automate your investing—from identifying the best schedule (days, months, and frequency) to using techniques like dollar-cost averaging (DCA). You’ll learn how seasonal dips and intramonth trends can help you slightly improve your average purchase price, all while maintaining a disciplined, hands-off approach that truly works for long-term growth.
Why Automated Investing?
The core idea behind auto-investing is straightforward: schedule recurring purchases of your favorite mutual funds, ETFs, or stocks at set intervals (e.g. every payday, or on a specific day of each month). This has two major benefits:
Consistency: By contributing automatically, you never miss a month or get tempted to “wait for the perfect time.” You keep buying regardless of short-term market gyrations, which is critical because some of the biggest up-days can appear without warning.
Dollar-Cost Averaging (DCA): When prices dip, your fixed contribution buys more shares; when prices rise, it buys fewer. Over many cycles, DCA naturally keeps your average cost in a healthy middle range—and removes the emotional pitfalls of trying to time exact highs or lows.
Even modest differences in your average purchase price add up if you stay invested for 10, 20, or 30 years. Auto-investing ensures you’re always in the game and capturing compounding growth.
Seasonal Insights: Best Months for Lower Prices
U.S. stocks follow seasonal ebbs and flows that can provide more favorable entry points for your monthly contributions. Let’s highlight the months that historically showed weaker performance:
September: Widely regarded as the most consistently poor month. Since 1950, the S&P 500 has averaged about –0.7% in September, making it the only month with a notably negative average return over many decades. The so-called “September effect” is a real phenomenon—investors returning from summer often trim positions, and some mutual funds sell underperforming holdings ahead of their fiscal year-end in October. By investing more heavily or simply maintaining your auto-buy through September, you might capture shares at lower prices before they rebound later in the fall.
February: After a typical January rally, February has often stalled out or turned negative (average near 0% or slightly below). A slowdown in new inflows post-January effect, plus digestion of year-end earnings news, can lead to mild declines. If you’re adding money monthly, you can simply be glad you’re buying whenever the market is taking a breather.
Other Weak Spots: Some research also tags June and August as moderate underperformers, part of the “summer doldrums.” Although the exact degree of weakness varies, it’s clear that late summer into early autumn often sees price dips. Keeping your automated contributions in place can be especially beneficial through these periods.
Key takeaway: If your main objective is to “buy low,” you’ll want to stay consistent during these weaker months—particularly September. Over the long run, that small advantage can give you a lower average cost basis.
Within Each Month: Identifying Best Days to Buy
Beyond month-to-month seasonality, there’s also an “intramonth” pattern where early-month trading tends to see a surge (the so-called turn-of-the-month effect), and mid-month often lags:
Turn-of-the-Month Rally: Historically, the last few trading days of one month and the first couple trading days of the next have delivered a large chunk of monthly market gains. Many retirement contributions, paycheck investments, and fund inflows hit right at month’s start, boosting stock prices.
Mid-Month Lull: Once that early money is in, the market typically drifts or softens during days 6 through ~15. Research shows these mid-month sessions have minimal or even slightly negative average returns. That translates to potentially lower stock prices if you buy around mid-month—an opportunity for your auto-contributions to lock in a better deal.
Late Month Patterns: Toward month-end, some investors position ahead of the next turn-of-the-month rally, lifting prices again. One suggestion is to schedule your automatic purchase just before the month-end upswing (e.g. around the 20th–25th). This means you’re in the market before late-month buyers push prices up.
The difference is not enormous, but over many months or years, capturing slightly lower entry points can compound into a tangible edge. Even just shifting your monthly purchase from the 1st to around the 10th–15th may help you regularly buy during that mid-month dip.
Best Practices: Combining Seasonality with DCA
Rather than trying to time everything perfectly, most experts recommend a systematic approach. Here’s how to incorporate the data:
Stick to a Consistent Schedule: Automation is your best friend. Decide whether you’ll invest monthly or align contributions with each paycheck (often biweekly). Dollar-cost averaging ensures you buy regularly, capturing dips when they occur and never missing a rally.
Adjust Your Default Purchase Day: If your broker or retirement plan allows you to pick which day of the month to invest, consider scheduling it around the middle (say the 10th, 12th, or 15th) or possibly in the second half of the month—i.e., a week or so before month-end. This lines up with historical lulls while still keeping your approach simple and consistent.
Go Slightly Bigger During Known Weak Months: If your budget has room for it, you might lean into extra contributions specifically in September or February. No need to reinvent your plan, but if you’re able to invest a bit more when these dips typically occur, it can enhance results over decades.
Don’t Overthink Minor Variations: The seasonal patterns are real but subtle. A few tenths of a percent advantage per month can add up over a 20–30-year horizon, but only if you remain disciplined. Avoid tinkering constantly or pausing contributions if the market surges at an unexpected time. “Time in the market” still beats “timing the market.”
Setting Up Your Automated Plan
Practical steps for implementing automatic investments:
Choose a Brokerage or Retirement Account: Many brokers allow automatic monthly investments in mutual funds, ETFs, or even fractional shares of individual stocks.
Pick the Day(s): Select a date—e.g., the 10th or 15th—when each deposit and investment purchase will happen. If your employer’s 401(k) plan invests on the 1st, that’s still fine; do what’s feasible within your plan. You could also do two smaller buys monthly (like on the 10th and 25th).
Stay on Autopilot: Once set, let it run. Avoid the temptation to skip or delay contributions due to news headlines. The data shows that missing even a handful of the market’s best days can severely cut your returns.
Review Seasonally: If you want a slight “timing tilt,” keep an eye on September and a handful of other typically weak months. If extra cash is available then, great—direct more into your portfolio. But keep your baseline DCA schedule intact.
Track and Rebalance: Periodically review your portfolio to ensure your stock/bond allocations match your goals. Automatic investing in equities can gradually overweight stocks if they rise faster than your other assets.
Making Seasonal Patterns Work for You
Historical data strongly suggests that:
September remains the most opportune month for bargain prices on average.
Mid-month is typically when stock prices are softer compared to early- or late-month strength.
Dollar-cost averaging is the easiest way to ensure you benefit from these patterns without micromanaging every fluctuation.
Focus on the big picture: consistent investing, month after month, harnesses the stock market’s upward trajectory. Seasonal dips and day-of-month strategies are simply “bonus points” that can boost your results around the edges. Over time, your systematic approach, combined with these small edges, helps lower your average cost per share and amplifies compounding gains.
Remember: sustained growth in your investments comes from being in the market for the long run, not hopping in and out. By automating your contributions—ideally on or near those historically weaker days—you keep stress low and your portfolio’s potential high. Let the monthly rhythms work in your favor, while you steadily build wealth with minimal effort.
