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Doesn't dollar cost averaging avoid the whole issue of timing the market? Index investing feels fairly safe to me with DCA if you can stick with it.
by lemax 5y ago
Doesn't dollar cost averaging avoid the whole issue of timing the market? Index investing feels fairly safe to me with DCA if you can stick with it.
- syntheticcdo 5y agoIf you have $120k today and the choice is invest $120k immediately or $10k a month for the next 12 months, based on historical trends, it is better to invest the 120k today -- studies have shown lump sum beats DCA about 2/3 of the time. Naturally, if you have $0 today, but are going to have 10k of additional free cash each month for the next 12 months, then 10k each month as soon as possible beats waiting a year for the full 120k.