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The short answer
Dollar-cost averaging means investing the same naira amount at fixed intervals, so you buy more units when prices are low and fewer when high. In our worked example, ₦20,000 a month for four months bought units at an average of about ₦1.975 against a simple average price of ₦2.025, but it does not guarantee beating a lump sum.
Dollar-cost averaging is a name borrowed from American investing, but the idea has nothing to do with dollars. It means putting the same amount of money into the same investment at regular intervals, whatever the price is that day. In Nigeria you can do it in naira with a mutual fund, an exchange-traded fund (ETF) or shares, and some people call it naira-cost averaging. This guide explains how it works, shows the arithmetic, and sets out where it helps and where it does not.
How regular buying works
You pick an amount you can keep up, say ₦20,000 a month, and a date, say the day after salary lands. On that date you buy, every time. When the price is high your fixed amount buys fewer units; when the price is low it buys more. Over many months the average price you pay per unit ends up below the simple average of the prices on your buying dates, because you automatically bought more of the cheap units.
It suits investments whose price moves. For open-ended mutual funds, the SEC's December 2019 rule amendments require bid and offer prices to be based on the net asset value calculated daily, so each purchase is made at that day's published price. For listed shares and ETFs, the price is whatever the market gives on the day your broker fills the order. A money market fund whose unit price is held at ₦1, which ARM Investment Managers says of its money market fund, gives no averaging effect at all: you are simply saving regularly into it, which is still useful but is a different thing. Our guide to how money market funds work explains why.
A worked example in naira
The figures below are an example, not the price of any real fund. An investor puts ₦20,000 into an equity fund on the first working day of each month for four months.
| Month | Unit price (example) | Amount invested | Units bought |
|---|---|---|---|
| 1 | ₦2.00 | ₦20,000 | 10,000 |
| 2 | ₦2.50 | ₦20,000 | 8,000 |
| 3 | ₦1.60 | ₦20,000 | 12,500 |
| 4 | ₦2.00 | ₦20,000 | 10,000 |
| Total | ₦80,000 | 40,500 |
- Average cost per unit: ₦80,000 ÷ 40,500 units = about ₦1.975.
- Simple average of the four prices: (₦2.00 + ₦2.50 + ₦1.60 + ₦2.00) ÷ 4 = ₦2.025.
- Value at the end of month 4 at ₦2.00 a unit: 40,500 × ₦2.00 = ₦81,000, a gain of ₦1,000 on ₦80,000 invested.
- Lump sum for comparison: ₦80,000 invested in month 1 at ₦2.00 buys 40,000 units, worth ₦80,000 at month 4, so no gain.
In this example regular buying came out ahead because the price dipped in month 3. If the price had risen steadily from month 1, the lump sum would have won, because all of its money was in the market for the whole climb. That is the main trade-off: averaging reduces the risk of putting everything in at a bad moment, but it does not guarantee a better result than investing a lump sum, and it does not protect you from a fall that lasts.
Costs can eat a small monthly amount
Regular small purchases make fees matter more. Some platforms charge a percentage on each deposit; Cowrywise's help centre, in a 2022 article on referral bonuses, described a 1.5% processing fee on naira mutual fund deposits. At that rate, as an example, each ₦20,000 deposit would cost ₦300, and four deposits ₦1,200, which would turn the ₦1,000 gain in the table above into a small loss. Check the current fee on your own platform before you start.
Shares bought through a stockbroker have their own charges, and a minimum charge per order can be heavy on a small trade. For a fund, look at the management fee and total expense ratio, and at any penalty for leaving early: Stanbic IBTC's money market fund page, for instance, describes a charge of 20% of accrued income if you redeem within a 30-day minimum holding period. Our guide to mutual fund fees in Nigeria goes through each type.
Inflation and the naira
Averaging changes the price you pay, not what your money is worth. The National Bureau of Statistics put headline inflation at 14.63% year on year in September 2026, as reported by Voice of Nigeria on 16 October 2026. An investment that grows more slowly than prices is still losing purchasing power, however smoothly you bought it. Check the latest NBS release for today's figure.
Steps to set up regular buying
- Choose an investment with a price that moves and that you are willing to hold for years, such as an equity or balanced fund. Our comparison of equity and balanced funds sets out the difference.
- Confirm the manager or broker on the SEC's Find a Registered Operator directory.
- Pick an amount you can keep paying in a bad month, and a fixed date.
- Set up a standing order or the platform's own recurring plan, and note any per-deposit charge.
- Keep every statement. Review once or twice a year, not every time the price moves.
- Decide in advance what would make you stop, such as needing the money, rather than stopping because the price fell.
Where Pryme fits
Pryme does not sell mutual funds or shares. If you keep your investing money in a Pryme account, your Personal Assistant can remind you of your buying date and prepare the transfer to your fund manager; nothing moves until you approve it. Money you are not investing can sit in a Naira Savings Box, with rates shown in the app.
Questions people ask
Is dollar-cost averaging better than investing a lump sum in Nigeria?
Not always. It lowers the chance of putting everything in at a peak, but if prices rise steadily a lump sum invested at the start usually ends up ahead. It is a way to manage timing risk, not a way to earn more.
Can I do dollar-cost averaging with a money market fund?
You can save regularly into one, but if the unit price is held at ₦1, as ARM says of its money market fund, there is no price to average. The benefit only applies where the price moves.
How much should I invest every month?
An amount you can keep paying for years, including in a tight month. Check the fund's minimum additional investment and any per-deposit fee, which matter more on small amounts.
Which day of the month is best to buy?
No day is reliably better. Choose one that follows your income so the money is there, and keep to it.
Sources
- SEC Nigeria: New Rules and Amendments, collective investment schemes (23 December 2019) · accessed Oct 2026
- ARM Investment Managers: FAQs (modified 27 March 2026) · accessed Oct 2026
- Cowrywise Help: How referral bonuses work (17 March 2022) · accessed Oct 2026
- Stanbic IBTC Asset Management: Stanbic IBTC Money Market Fund · accessed Oct 2026
- Voice of Nigeria: Headline inflation drops to 14.63 per cent (16 October 2026) · accessed Oct 2026
- SEC Nigeria: Find a Registered Operator · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.