How likely would it be that youre in 100 equities by the time rolls around after losing 40 of your money in short amount of time with your lumpsum investment? On the other hand, new investor who was just getting started in Try the analysis again and Im sure youll have much different results, with DCA looking much better than it does according to your model. And in fact, after taking into account inflation, it appears as if you would be just treading water.

If you have large chunk of cash sitting around to be invested, youre better off just moving forward and investing it. Try the analysis again and Im sure youll have much different results, with DCA looking much better than it does according to your model. In the comments, had question regarding what influence the effect of making small systematic investments over time, or dollarcost averaging, would have on this data over the same period.

Looking at the charts above, lets assume youre relatively new investor who is slowly plugging away little bit of money each month wouldnt have noticed such dramatic decline, and is probably more likely to stay true to their investment allocation instead of bailing out to something safe. I think your analysis is missing piece that doesnt dollar averaging DCA justice. If you had 50k, and are deciding whether to lump sum invest it or DCA it, if you DCA it would hope you wouldnt leave it as cash sitting under the matress which is essentially what your example does.

And in fact, after taking into account inflation, it appears as if you would be just treading water. How likely would it be that youre in 100 equities by the time rolls around after losing 40 of your money in short amount of time with your lumpsum investment? On the other hand, new investor who was just getting started in Try the analysis again and Im sure youll have much different results, with DCA looking much better than it does according to your model.

This is quite bit off of the 1011 average that we usually talk about. Try the analysis again and Im sure youll have much different results, with DCA looking much better than it does according to your model. If you have large chunk of cash sitting around to be invested, youre better off just moving forward and investing it. Meg over at All Financial Matters wrote piece that highlighted the fact that the past ten years for the S&P was just under 4.

Related Blogs