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It's not about the absolute numbers so much as the fact how that fictional saver behaved after having a huge chunk of his investment wiped out by each following
by heipei 6y ago
It's not about the absolute numbers so much as the fact how that fictional saver behaved after having a huge chunk of his investment wiped out by each following market downturn: He never sold anything, and that's the key lesson here. For me reading about this worst market timer was actually quite comforting because it's assuming the unrealistic worst-case scenario in terms of timing coupled with level-headed behaviour afterwards.
There was also a study done by Vanguard which showed that historically, dollar-cost averaging underperforms lump-sum investments which was just as interesting to me.
- joubert 6y ago> There was also a study done by Vanguard which showed that historically, dollar-cost averaging underperforms lump-sum investments which was just as interesting to me. I'd be very interested to read the study, but the only text I've found so far is this: https://investor.vanguard.com/investing/online-trading/invest-lump-sum https://investor.vanguard.com/investing/online-trading/inves... It seems logical to me that lump sum investing > dollar-cost averaging (which is why I do the former), but I'd be curious to see empirical research.
- potiuper 6y agohttps://web.archive.org/web/20200313022845/https://personal.vanguard.com/pdf/ISGDCA.pdf https://web.archive.org/web/20200313022845/https://personal....