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The post defines that as “Systematic Investing”, while DCA is defined as taking a larger amount (e.g. a windfall of $10k) and deploying it over time instead of
by evancox100 3y ago
The post defines that as “Systematic Investing”, while DCA is defined as taking a larger amount (e.g. a windfall of $10k) and deploying it over time instead of all at once.
You can have your own definitions but this is clearly explained in the post.
- notimetorelax 3y agoThere’s time value of money. For the DCA and LS the post compares investing money to accrue rate of return vs just keeping most in cash. Of course, given that stocks in average go up, it’s best to invest as soon as possible.
- AlbertCory 3y agoThe title is clickbait, so you're wrong. DCA is what regular employees do with their 401K, so the title implies that they're doing investing wrong. They're not. The "LS" hypothesis corresponds to virtually no behavior in the real world.
- AlbertCory 3y ago"dollar cost averaging" is not subject to redefining. It's already got a long-established definition. The author is free to add new qualifiers to the word, but putting your regular salary deductions into a stock or index, e.g. your 401K, is DCA. https://www.investopedia.com/terms/d/dollarcostaveraging.asp https://www.investopedia.com/terms/d/dollarcostaveraging.asp https://www.forbes.com/advisor/investing/dollar-cost-averaging/ https://www.forbes.com/advisor/investing/dollar-cost-averagi...