About Dollar Cost Averaging (DCA)

About Dollar Cost Averaging (DCA)

According to:
http://en.wikipedia.org/wiki/Dollar_cost_averaging

"Dollar cost averaging (DCA) is an investment strategy that may be used with any currency. It takes the form of investing equal monetary amounts regularly and periodically over specific time periods (such as $100 monthly for 10 months) in a particular investment or portfolio."

Although the definition claims that DCA is an investment strategy, in fact, instead, it's a money management way that overlooks market reading of any time frame and hence never works.

Regardless of philosophy, trading or investment actions consist of entry, money management and exit. In general, entry and exit are related to market reading, while money management allocates capital percentage etc.

DCA resolves entry and money management with exit strategy being totally neglected.

If exit employs DCA as well, ie, a form of taking equal monetary payouts periodically, typically monthly, a brain-washed way taken for granted as advertised regarding retirement plan with projected long term return, keep in mind that the "investment" might be frequently in significant loss even though "in a long run the market goes up". For example, as of 2012 Nasdaq has been consistently much less than that of 2000. For another, think about China A share which is doomed to never rebound. Isn't the stock market just a fortune re-distributing platform to rob middle class and enrich richers?

For majority hard money makers, DCA is the natural and only way for IRA and 401K, which are just scams of wall street. Middle class can't retire decently on IRA and/or 401K, which as "investments" underperform the market and can't beat inflation. In reality, current middle class baby boomers statistically are retiring just as poor peers, who've never had decent pay throughout the whole life. This is one of the reasons that middle class has no fundamental difference from poors, and both rely on welfare for at least retirement and emergency.