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Your once in a lifetime trade is flawed in 2 ways: 1. the S&P 500 has never gone completely to zero. It is not the typical gamble where you lose the entirety o
by readthenotes1 3y ago
Your once in a lifetime trade is flawed in 2 ways:
1. the S&P 500 has never gone completely to zero. It is not the typical gamble where you lose the entirety of your bet if the random doesn't happen your way.
2. you're assuming that it is an event instead of an investment where time matters, where are you are making multiple bets and historically the random is in your favor.
It can take 20 years for the S&P 500 to regain its former position if you include inflation, but for most people learning about investing, that is about a half of their expected investment time.
- throw0101b 3y ago> 1. the S&P 500 has never gone completely to zero. The S&P 500 specifically, no. But markets have gone to zero when (e.g.) there were Communist revolutions and private property went away. If you were invested in those then you'd lose the money (and if it was as a domestic investor you'd have other (political) problems as well).
- readthenotes1 3y agoThat is certainly a quibble. DCA is an artifact of retirement plans in Western countries, notably the United States. It is certainly possible for the United States to dissolve in an asteroid impact, but those tail risk type events are not worth worrying about for the type of investor that is going to be thinking about dollar cost averaging.