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DCA assumes you have a lump sum to invest right? If you did have a lump sum, dropping it in one go vs DCA has the same expected value (or perhaps all in one go
by TomGullen 6y ago
DCA assumes you have a lump sum to invest right? If you did have a lump sum, dropping it in one go vs DCA has the same expected value (or perhaps all in one go has higher EV due to reduced transaction costs).
I would also of thought volatility over 15-20 year term when choosing between DCA or lump investment is largely irrelevant and not worth hedging against.
- nabla9 6y ago> I would of thought volatility over 15-20 year term when choosing between DCA or lump investment is largely irrelevant. You can see the effect for the total return of your investment even in 15-20 years. Try for example SP500TR for 20-year period and slide the starting point over dot-com-bubble. 20 year ROI(TR) alternates from >300% to 180% and back to >300% within 3-4 years.
- fsckboy 6y ago> dropping it in one go vs DCA has a higher expected value. If you expect positive returns, the sooner all your money is earning the better.