Capital Management

Recurring Investing Does Not Fix Concentration Risk

By Walid Mograbi · 2026-04-09 · 2 min read

Consistency in contributions helps, but it does not automatically turn a concentrated position into a balanced plan.

Why this lesson matters

Consistency in contributions helps, but it does not automatically turn a concentrated position into a balanced plan.

The core idea

• Dollar-cost averaging reduces the pressure of market timing, but it does not remove the risk of concentrating the whole plan in one asset or one sector.
• If every contribution goes to the same idea, risk can remain high even when your schedule is disciplined.
• Diversification depends on what the plan actually owns, not only on how regularly money is transferred into it.

Practical example

A monthly BTC purchase plan is still concentrated if every instalment goes into the same single asset and nothing else.

Common mistakes to avoid

• Assuming schedule discipline equals diversification
• Sending every contribution into one theme only
• Ignoring portfolio concentration because the plan feels systematic

What to do next

It separates the benefit of disciplined investing from the separate need to spread risk across the plan itself.

Important caution

Repeating contributions does not make a concentrated asset low risk on its own.

Further reading

• https://www.investopedia.com/terms/d/dollarcostaveraging.asp
• https://www.investor.gov/introduction-investing/getting-started/asset-allocation
• https://www.justetf.com/en/academy/etf-savings-plan.html