Questions tagged [dollar-cost-averaging]

Dollar-cost averaging (DCA) is an investment technique of buying a fixed dollar amount of an investment on a regular schedule, regardless of share price. The investor purchases more shares when prices are low and fewer shares when prices are high.

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Dollar cost averaging buy and sell can be chaotic when reporting tax?

I was thinking that with dollar cost averaging buy, we actually can do the same thing when we sell: just sell $100 per day, just like we were buying $100 per day. However, won't that cause a total ...
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Is a company 401k better than a IRA?

Company is moving to a poorly rated 401k provider. If I keep the money in company 401k I can take advantage of dollar cost averaging with poor fund choices. If I rollover to an IRA I can invest as I ...
Marinaio's user avatar
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How to implement direct indexing without buying fractional shares

I wish to invest passively, using dollar-cost averaging, in my local stock market, whose market-cap index is composed of only 17 companies. Since the only ETF available has a very high management fee (...
Claudiu's user avatar
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What is the best place to park the money while waiting for a sizable future market drop?

For the past few years I have been investing in equity mutual funds via equal monthly installments (dollar cost averaging). With last year's drop in the market, I was willing to put a lump sum into ...
Aastik's user avatar
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How/How much does volatility effect dollar cost average?

Notice that this question does not involve lump sum investing. Background/Own research: Since it is hard to come across someone/a website selling funds/stocks/... who does not tell you about dollar ...
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Will I pay capital gain tax if I sell a part of my invest which I accumulated by Dollar Cost Averaging over long time?

I am an investor in New Zealand. Generally in NZ, there is no tax over a capital gain if the investment is done for the intent of a long-term time horizon (12 months or more). I use dollar-cost-...
Mazhar's user avatar
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How do I track my investment value when using Dollar Cost Averaging strategy

I am in the process of investing a windfall using Dollar Cost Averaging strategy. I want to plot my portfolio value in a spreadsheet, but if I simply chart the current price, it doesn't reflect the ...
Steve's user avatar
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Is there a study on profitability of broadly diversified indexed portfolios using dollar-cost averaging?

This topic has been discussed a lot (see e.g. Why isn't everybody rich?, What if You Only Invested at Market Peaks? and Stock market long term risk). There seems to be the conclusion that investing in ...
D1X's user avatar
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Can you really always yield profit if you diversify and wait long enough?

It is a common assumption (and, as far as historical stock market data goes, also proven) that the stock market is always growing if you enlarge the time window long enough . In other words: The stock ...
Stefan Woehrer's user avatar
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How much and when to sell when I use dollar cost average?

I want to start investing in Bitcoins (but the question applies to other assets as well) using a simple dollar cost average strategy. What I do not understand about this strategy is how and when I ...
cholo14's user avatar
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Is there a limit to the effectiveness of dollar-cost averaging when dividing up purchasing events? [duplicate]

If buying $12,000 worth of low-cost index funds, let's say that I buy $1000 per month for a year, instead of buying $12,000 all at once. From what I understand, this makes it more likely to improve ...
cflax's user avatar
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Buying shares in stages

I normally buy shares of stocks in stages. I don't buy all of my shares at once. I'm asking, once I buy say 50% of the shares and the stock goes up say 30% in 1 week, I don't want to dollar cost ...
tom's user avatar
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Is there a concept similar to "continuous compounding" but related to dollar cost averaging when buying (e.g.) shares or bitcoins?

I know that dollar cost averaging (DCA) is "drip feeding" a total amount to be invested over regular intervals like daily, weekly or monthly, so that each share purchase (or whatever the ...
seventyeightist's user avatar
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Is there a particular day of the month that has been shown not to be adequate for buying ETFs?

This question refers specifically to buying ETFs. When performing dollar-cost-averaging, one typically chooses a day of the month to rebalance. The question is pretty simple: Are there any specific ...
D1X's user avatar
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Are dividends effectively "dollar cost averaged" across the quarter?

This is off the back of my previous question where answerers established that dividends are equivalent to selling no matter market conditions (tax and transaction costs aside). Selling $100 worth of ...
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Dollar cost averaging with variable frequency

I have started to invest in Tesla shares, but they are expensive given my budget. I have a budget of about $1000 a month. I can't use monthly dollar cost averaging because I would either buy 1 or 2 ...
letsplay14me's user avatar
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How does "Losers Average Losers" relate to dollar-cost averaging?

Paul Tudor Jones was once pictured with a sign saying "Losers Average Losers". I've often seen this taken as a statement against trend trading. In other words, "if you keep doubling-down on positions ...
J. Mini's user avatar
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Dollar cost averaging vs buy low/sell high

It is often said that we should "Buy low, sell high". But we can't know when the market is at its low or high. Another phrase we hear is "dollar cost averaging" Consider: A long term young ...
mina's user avatar
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31 votes
9 answers
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Should a middle class person emulate a very wealthy investor for % of cash hold?

Warren Buffett is keeping $128 billion that can be deployed when stock market goes down. Should a middle class person hold little more of their investments as cash? Suppose if the person is ...
Raj's user avatar
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Dollar cost averaging with a bonus start sum [duplicate]

I'm going to do some old school value investing, holding around ten stocks. Other than investing say 2k every month, I also have around 100k in savings. I'm contemplating investing these alongside ...
Gleiemeister 2000's user avatar
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DCA into an index? [duplicate]

We have acquired a large sum from the sale of a home and want to invest it responsibly. Our long term return expectation is a mere 6.8%/yr, selected by looking at the worst 20yr stretch of the SP500 ...
acpilot's user avatar
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What should I do with the stock I own if I anticipate there will be a recession?

I want to preface this with saying I am not asking if there will be a recession because I recognize that this is impossible to answer. I am asking if I feel there will be a recession, what should I ...
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Dollar-cost-averaging interval based on decay of autocorrelation?

I've read descriptions of DCA as buying more of something when it's cheap, and less when it's expensive. In contrast, if you buy much of that thing all at once, you may be buying the whole load at a ...
user2153235's user avatar
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Dollar Cost Averaging with At the Money Straddle

I was reading Dollar-cost averaging using an option strategy. Consider one month's investment of $30k. Looking at the VTI options, selling at ATM straddle expiring on June 21 worth $3.04 + $6.91 = $9....
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Should returns from my S&P Index fund (SWPPX) match the S&P 500 index?

I have been purchasing ~ $300 worth of SWPPX twice per month since March 2015. My annualized return appears to be 8.22%. I used the annual returns for the S&P500 from here: https://ycharts.com/...
Joe_P's user avatar
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How do you automatically invest with Interactive Brokers?

I've been using Interactive Brokers for a while and would like to implement an automatic trade in a regular (say monthly) interval. Specifically, I would like to dollar-cost or value average a fixed ...
Pink Flying Elephant's user avatar
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7 answers
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Does dollar-cost averaging just means taking risk later?

I am investing in mutual funds and hence reading and trying to learn about it. I was reading this answer which says lump sum investment is far more efficient than DCA. Well, that does not surprise me....
Aastik's user avatar
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Dollar cost averaging - Should I still do it if I have a large pile of cash now?

I currently have a large pile of cash savings ($240,000) which I really should have been investing all this time, but the past is past and no point dwelling on it. I am currently 38 years old (2 kids....
cgg's user avatar
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Determining optimum period for DCA

I have a non-trivial amount of money which I want to transfer from cash deposits into ETFs. I understand that investing a fixed amount each month (DCA) is the best way to go about this for someone ...
Futon's user avatar
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How to calculate weighted average cost while taking into account both buys and sells?

I'm trying to write a script that will analyze all of the buys and sells I have made for each cryptocurrency I own, and then tell me the average cost for a coin so I know the cost at which it is ...
Derrick Miller's user avatar
2 votes
1 answer
94 views

Rollover into bond fund to do dollar cost averaging [duplicate]

I elected to accept my former employer's pension buyout offer of $15K and roll it into my 401(k) plan. If I had this in cash I would invest it over time to leverage the benefit of dollar cost ...
I say Reinstate Monica's user avatar
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3 answers
707 views

Does dollar cost averaging apply when moving investments between fund families?

We'll likely be moving ~$100,000 (two Roth IRAs, about 80k/20k split) from a mix of Nationwide funds to a combination of Vanguard whole-market stock and bond index funds (details below). All else ...
Jeff Levine's user avatar
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2 answers
191 views

Should I employ dollar-cost averaging between selling one fund and investing in another?

I am planning to liquidate my holdings in two non-Vanguard funds and consolidate in VTSAX. This will all be done inside a Vanguard Roth IRA, so commissions will only be due for the two sell orders. ...
givemesnacks's user avatar
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Value averaging and back-end fee

Value averaging (VA) is said to be outperforming dollar cost averaging (DCA) most of the time. But, as far as I know, most financial articles don't concern about the impact of back-end fee on VA ...
armamoyl's user avatar
2 votes
2 answers
381 views

Dollar cost averaging an expensive asset

Suppose I want to invest $1000 every month in asset X, in order to implement a dollar cost averaging strategy. The idea here is that when X is cheap, I will end up buying more shares with my $1000, ...
Superbest's user avatar
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Dollar Cost Averaging (Or value averaging) vs Lot sizes, what am I missing?

I just got my first trading account, in Singapore, and was trying to see if I could use Dollar cost averaging myself on, say STI ETF. But I found out that the stock orders had to number minimum of 100 ...
Karthik T's user avatar
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3 answers
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Can you have a positive return with a balance below cost basis?

I use Fidelity for an investment. Their website says I have a cost basis of $5000.00 invested in FUSVX. Now the balance of this mutual fund (which I believe is simply market value at closing from ...
P.Brian.Mackey's user avatar
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3 answers
982 views

Make IRA contributions all at once or periodically throughout the year?

I am trying to decide if I should make this year's IRA contribution all at once at the beginning of the year, or if I should space out the contributions throughout the year. If I make it all at once ...
mushroom's user avatar
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1 vote
2 answers
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Value averaging vs lump sum

I know there is evidence out there which suggests that a lump sum investing approach will outperform a dollar-cost averaging approach approximately 2/3 of the time, e.g. https://pressroom.vanguard.com/...
Bob's user avatar
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2 votes
1 answer
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Lump Sum Investing vs. Dollar Cost Averaging (as a Long Term Investor)

My company has an employee stock program in which employees put a percentage of their paycheck into the company for a period of time, after which they can purchase shares at the lower of the start and ...
Matthew Moisen's user avatar
7 votes
1 answer
228 views

Low risk withdrawal from market. Is there a converse to dollar-cost-averaging?

In the article by Carson C Chow linked by "The mathematics of dollar cost averaging" it is explained that investing a fixed amount of money each time period gives a lower expected cost per stock than ...
Wandering Logic's user avatar
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If I'm cash-flow negative, should I dollar-cost-average the money from my bonus over the entire year?

I asked a similar question last year, and got great advice. This year, there's a new wrinkle. I previously had automatic investments set up to move a small amount of money each day from cash to a ...
Jer's user avatar
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3 votes
2 answers
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When to start investing in an index fund? Wait for a bear market, use dollar cost-averaging, or another approach?

I think index funds are one of the best investment tools for the defensive investor. Still, when should one start investing money in an index fund? It could result in a loss to get in at the top of a ...
oldergod's user avatar
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5 votes
2 answers
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Does long term asset growth really converge to that derived from compound interest formula?

Many websites/experts claim that the longer you hold your assets, the likelier your asset's return is closer to that predicted by the compound interest formula. However, some other experts claim ...
Enno Shioji's user avatar
15 votes
5 answers
3k views

Does it make sense to buy an index ETF (e.g. S&P 500) when the index is at an all-time high?

I have some money I intend to invest over the next 3-4 years. An important chunk of my portfolio would be invested in a stock market index ETF such as one representing the S&P 500. Unfortunately, ...
ggambetta's user avatar
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Does dollar cost averaging into a bond fund mitigate rising interest rate risk?

Everyone says not to buy bonds now because interest rates will rise. I'm wondering how dollar cost averaging (and reinvesting returns) helps reduce the risk. I'm not sure how bond funds work in ...
Scott Anderson's user avatar
11 votes
4 answers
3k views

Over how much time should I dollar-cost-average my bonus from cash into mutual funds?

I just cleared about $65k from my bonus. I don't want this sitting in cash, but at the same time prefer to move into stocks/bonds over time (e.g. I don't want to invest all $65k at one price, and ...
Jer's user avatar
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9 votes
5 answers
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Dollar-cost averaging: How often should one use it? What criteria to use when choosing stocks to apply it to?

This may seem like a simplistic question, but I haven't found any great answers on it yet. How often should one use dollar-cost averaging? What criteria do you use when choosing a stock to apply ...
theringostarrs's user avatar
2 votes
4 answers
1k views

Can one use dollar cost averaging to make money with something highly volatile?

There are things one can buy in the market that fluctuate in value 20% or more a day. How would one figure out if dollar cost averaging could make one money, based on instruments with large ...
Ray K's user avatar
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4 votes
3 answers
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Micro-investing: How to effectively invest frequent small amounts of money in equities?

I am planning to invest a tiny amount of money each month (less than $100) in some way. (I hope what begins as a small amount is more a confidence/skill builder [mainly for the benefit of the wife - I'...
David in Dakota's user avatar