Stack Exchange Network

Stack Exchange network consists of 175 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers.

Visit Stack Exchange

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.

1
vote
2answers
94 views

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....
4
votes
1answer
873 views

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/...
0
votes
3answers
313 views

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. For example I would like to dollar-cost or value average an amount ...
23
votes
7answers
6k views

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....
8
votes
2answers
624 views

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....
0
votes
1answer
55 views

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 ...
1
vote
4answers
1k views

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 ...
2
votes
1answer
61 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 ...
4
votes
3answers
439 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 ...
4
votes
2answers
129 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. ...
0
votes
2answers
67 views

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 ...
1
vote
1answer
133 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, ...
-1
votes
2answers
128 views

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 ...
2
votes
1answer
744 views

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 ...
2
votes
3answers
876 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 ...
0
votes
2answers
764 views

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/...
2
votes
1answer
405 views

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 ...
7
votes
1answer
200 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 ...
6
votes
2answers
491 views

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 ...
4
votes
2answers
2k views

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 ...
5
votes
2answers
213 views

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 ...
15
votes
5answers
2k 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, ...
1
vote
2answers
1k views

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 ...
9
votes
4answers
2k 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 ...
6
votes
4answers
3k views

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 ...
2
votes
4answers
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 ...
3
votes
3answers
461 views

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'...
7
votes
3answers
1k views

Got a large cash sum, wanna buy stocks. Should I buy all at once, or spread it over time?

Suppose that I just received a large sum of money, that I want to use to buy stocks. Is there an advantage to split my stocks purchases over a period of time, to protect me against the risk that ...
15
votes
1answer
1k views

The mathematics of dollar cost averaging

Does anyone have a reference to a detailed mathematical analysis of the process of dollar cost averaging and whether it is really beneficial? This question isn't detailed enough.
3
votes
2answers
2k views

Finding a Brokerage for Dollar-Cost Averaging

What lessons can you share when practicing dollar-cost averaging with a discount brokerage? The goal is an inexpensive way to invest with every paycheck. With amounts that small, commissions have a ...
12
votes
4answers
1k views

Is an index fund a good choice for a starter investment?

As an individual that is willing to consistently invest ~100-150 dollars monthly into an investment, willing to devote an average of an hour a day to educate himself / monitor investments, what kinds ...
13
votes
3answers
4k views

What is most time-efficient way to track portfolio asset allocation?

I've recently decided I wanted to track my investments over time so that I could accurately determine really cool financial things like: My actual asset allocation My actual rate of return over time ...
5
votes
1answer
425 views

How to determine desired/required value with “value averaging”?

As opposed to dollar cost averaging (DCA), value averaging (as described in this eHow article) is a technique where the investor determines the value the investment should have after a given time ...
9
votes
2answers
4k views

Comparing IRA vs 401K's rate-of-return with dollar cost averaging

I have both an IRA in Vanguard and an old employer's 401k with Fidelity management. I would like to compare the performance between the two accounts over time, in order to determine if I should ...
22
votes
7answers
1k views

Does dollar cost averaging really work?

Does dollar cost averaging really work? If I have money available now, why shouldn't I invest it all at once? If the market's going up, wouldn't that be better?