Why Dollar Cost Averaging Helps Expat Investors Build Wealth In Volatile Times

2025 has been defined by significant volatility in the markets with the mood swinging wildly between optimism and fear. This year we have witnessed:

• The largest market decline since the 2020 stock market crash in response to President Trump’s Liberation Day tariff frenzy in April.
• An abrupt reversal of the tech- and AI-driven rally that pushed equity prices to lofty highs earlier in the year, prompting fears that the AI bubble could burst.
• Dramatic swings in the fortunes of Bitcoin, the world’s largest cryptocurrency which last month suffered a decline of over 25%.

These developments can feel unsettling and, for investors, the temptation to sell can be strong. Illogical as it may seem, staying committed to a disciplined investment strategy is often the most reliable way to manage volatility and keep long-term financial plans on track.

For many expat investors, the instinct during choppy markets is to pause or step back from investing. Yet volatility is a natural part of market cycles and an expected feature of investment management.

While price swings can feel uncomfortable, they also create opportunities for disciplined investors who stay focused on long-term goals. Dollar cost averaging is particularly valuable in years like 2025 because it removes the pressure of trying to time the market, a strategy that even professional investors rarely get right.

Dollar cost averaging involves investing a fixed amount at regular intervals, regardless of market conditions. This simple approach ensures that you remain consistent, even when markets feel uncertain.

There are two major advantages:

1. You can ignore short-term market noise

Once you have committed to investing regularly over the long term, you no longer need to worry about whether markets are up or down. Your investment management strategy already anticipates periods of volatility. This frees you from emotional decision-making and keeps your financial planning on track. 

2. You automatically benefit when prices are low

When markets dip, your regular contributions buy more units at lower prices. Over time this can improve long-term returns, positioning your portfolio to benefit when markets recover. Rather than trying to second guess short-term movements, you are taking advantage of them.

While consistency is key, the quality of the underlying investments remains essential. Warren Buffett’s well-known principle is still highly relevant:

“If you are not willing to own a stock for ten years, do not even think about owning it for ten minutes.”

Ask yourself whether you would be comfortable holding your current investments through an extended period of market closure. If the answer is yes, it is likely because you hold quality companies or funds with strong cashflow, low debt and resilient business models. These are the workhorses that continue to deliver value over time.

Conversely, companies with stretched balance sheets or overly exposed to challenging conditions should be treated with caution. Diversification also remains a cornerstone of effective investment management, helping mitigate risk across sectors, regions and asset classes.

Some investors feel tempted to hold back until conditions appear more stable. Yet history shows that waiting for the “perfect moment” usually results in missed opportunities. Markets often recover faster than expected, and missing only a handful of the strongest days can significantly reduce long-term returns.

Dollar cost averaging removes this risk entirely. Instead of relying on predictions, you build wealth steadily over time by remaining invested through different phases of the market cycle.

If you feel unsure whether your current investments meet the standards of quality and diversification described above, a portfolio review can help. Understanding the balance of your holdings and ensuring that your strategy reflects your long-term goals is an important part of sound financial planning.

If you would like support and expert advice reviewing your portfolio or strengthening your long-term investment management strategy, our team can help.

A Hoxton Wealth adviser can assess your asset mix, suggest adjustments where needed and ensure you are well placed to navigate ongoing volatility while continuing to build wealth consistently over time.

Contact us today for a consultation and secure your financial future.