4 ms·
Sources?
by ericb 9y ago
Sources?
- ccleve 9y agohttps://www.google.com/search?q=dollar+cost+averaging+empirical+evidence&ie=utf-8&oe=utf-8 https://www.google.com/search?q=dollar+cost+averaging+empiri... Dollar cost averaging doesn't work because it makes an assumption that doesn't hold in the real world. It assumes that stocks trade in a range, and revert to a "true" price over time. If there were a true price, then you would in fact buy more when the price was low and less when it was high and DCA would work. But stock prices look more like a random walk, and they display no tendency to revert to a mean. Here's an article I just found: http://www.crossingwallstreet.com/archives/2010/11/dollar-cost-averaging-the-myth-that-wont-die.html http://www.crossingwallstreet.com/archives/2010/11/dollar-co...
- p4lindromica 9y agoThe book A Random Walk Down Wall Street
- ucaetano 9y agoBesides all the actual sources that others provided, there's always the "proof by capitalism": if DCA made sense, institutional investors would use it and make more money. They don't use it.