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Dollar-cost averaging is theoretically sub-optimal to lump sum investing in terms of expected return. This was shown to be the case in a mean-variance framewor
by mycall 6y ago
Dollar-cost averaging is theoretically sub-optimal to lump sum investing in terms of expected return.
This was shown to be the case in a mean-variance framework in 1979 by George Constantinides [0]
[0] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=148754 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=148754
- satvikpendem 6y agoCorrect, however most people don't have the discipline or money to put in all their money in the beginning of the year, or whenever they get it. It's better to automate the habit of deposits rather than not doing so.