Comments on: Investing in the Stock Market Over the Past 10 Years: How Did Dollar-Cost Averaging Fare?

By: RedGreen

RedGreen — Sat, 26 Mar 2011 14:30:22 +0000

Sell you goat, and leverage your donkey.

By: saddampatel

saddampatel — Mon, 11 Aug 2008 07:02:54 +0000

i did not have debit card how can i invest in the stock market. waiting for ur response

By: HF Markets

HF Markets — Tue, 27 May 2008 10:30:39 +0000

Have been a big fan of dollar cost averaging (or pound cost averaging as we know it) for many years. However, with cost affective trading and many quality information blogs and sites, more people should look at trading themselves.

Having transfered £1500 pounds from a pension to a fund managed pension the company… in twenty years I might add… has only made this sum £3000, that’s around 4% compound! It would be difficult not to produce that figure trading on your own!

By: how to invest in the stock market

how to invest in the stock market — Wed, 21 May 2008 09:23:47 +0000

Good post. Three things one should care about before investing in stock market- Evaluate Your Financial Situation, Decide What to Invest In, Decide How Much to Invest.

By: Invest in stocks

Invest in stocks — Wed, 21 May 2008 08:45:23 +0000

Hi Jeremy,
Its great to know about the valuable information. Your posts are always informative and helpful. Thanks for all your hard work on this one!

By: Customers Revenge

Customers Revenge — Wed, 21 May 2008 01:29:55 +0000

You have to invest the lump sum. Dollar cost averaging makes no sense on the lump sum unless you know the future. Maybe you do want to diversify the sum, but you don’t want to hold on to it.

By: Goran Web

Goran Web — Sat, 17 May 2008 10:16:39 +0000

When you look at it this way it all makes sense. Great post for those that think that the stock market is not the place to invest.

By: ri

ri — Fri, 16 May 2008 22:28:16 +0000

I think your analysis is missing a piece that doesn’t dollar cost averaging (DCA) justice.
If you had $50k, and are deciding whether to lump sum invest it or DCA it, if you DCA it I would hope you wouldn’t leave it as cash sitting under the matress (which is essentially what your example does). Rather, I would hope you would invest it in something else, say a relatively risk-free treasury bill? Then you gradually transfer to the market investment. Try the analysis again and I’m sure you’ll have much different results, with DCA looking much better than it does according to your model

By: Jeremy

Jeremy — Fri, 16 May 2008 15:27:21 +0000

LC, I’d still just invest it when you have it. As long as doing so doesn’t strain your budget or take money away from other important areas there is no sense in spreading it out.

You’re actually still doing DCA, but you’re on an annual basis instead of monthly. One January might be high, another might be low, and over the next 10, 20, or 30 years, you’ll effectively have been buying at a number of good and bad times.

In the example in this post, the lump sum was made with no additional funds ever being added. But since you will be doing this on an annual basis, you probably have little incentive to spread it out much more.

By: LC

LC — Fri, 16 May 2008 12:21:16 +0000

My husband and I usually make our Roth contributions at the beginning of the year in January as a lump sum, so that we earn the most interest possible on that money. Would it be better to divide this into monthly contributions? Some money would enter the market later but it would decrease the risk of entering on a “bad” day.