DCA/定投 only matters if you don't have much invested already

來源: njrookie 於 2024-01-21 15:40:14 [檔案] [博客] [舊帖] [給我悄悄話] 本文已被閱讀：次 (1632 bytes)

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

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.

So yes to DCA at this stage.

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Once you have lots of $$$ invested in the market, then DCA or not makes little difference to the overall wealth accumulation.

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.