if you start with 1M, monthly 1K DCA makes little difference

來源: njrookie 2024-01-17 11:04:39 [] [博客] [舊帖] [給我悄悄話] 本文已被閱讀: 次 (1368 bytes)
本文內容已被 [ njrookie ] 在 2024-01-17 11:56:16 編輯過。如有問題,請報告版主或論壇管理刪除.

and if you do not have 1M liquid wealth to invest yet, focus on your w2 and 

just max out your retirement acct and go 100% SP500 until you reach 1M.

 

focusing on your career = investing in yourself. human capital, that is.

 

your overall return is the weighted avg of different components.

the weights is the $$ $ amount invested in that component.

the components usually are thought of as diferent ticker names. but you can also view each DCA allocation as another component.

when you have 1M invested already, and have another 10K to DCA throught the year, that 10K is only 1% of portfolio weights. That 10K can make 100% , but it can only add 1% to your overall return.

In summary, DCA is good for

1 trendless market (as in 2022-2023, where market did a whole lot of nothing). An even better approach in this type of market is a tiered rule: you sell a certain % of your existing investment for certain % of market upward movement; and you buy a certain % for certain % of market downward movement.

2 young and new investors without much networth. In this case DCA helps you to capture slightly better than average price (as same $$$ amount buys more shares at lower price).

 

Just my 2c.

 

所有跟帖: 

and DCA helps if market is not trending, ie mean reverting -njrookie- 給 njrookie 發送悄悄話 njrookie 的博客首頁 (441 bytes) () 01/17/2024 postreply 11:39:14

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