Author Topic: Blog post: Should you be dollar cost averaging?  (Read 4825 times)

Patrick

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Blog post: Should you be dollar cost averaging?
« on: March 03, 2016, 11:46:42 am »
http://investorchallenge.co.za/should-you-be-dollar-cost-averaging/

Hamster

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Re: Blog post: Should you be dollar cost averaging?
« Reply #1 on: March 03, 2016, 05:13:39 pm »
Very nice article

Mr_Dividend

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Re: Blog post: Should you be dollar cost averaging?
« Reply #2 on: March 04, 2016, 07:47:24 am »
Nicely done Patrick. I was all set on adding monthly - but you've pretty much convinced me to invest the 30K now. Or maybe 10K p/m over the next three months. For the life of me, cannot understand how come the miners are recovering extremely well, whereas the commodity prices are not - or as least, haven't recovered in a big way.

Patrick

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Re: Blog post: Should you be dollar cost averaging?
« Reply #3 on: March 04, 2016, 07:59:45 am »
Thanks Hamster

Nicely done Patrick. I was all set on adding monthly - but you've pretty much convinced me to invest the 30K now. Or maybe 10K p/m over the next three months. For the life of me, cannot understand how come the miners are recovering extremely well, whereas the commodity prices are not - or as least, haven't recovered in a big way.
Yeah, it was your comment that made me pause. I must say though, the last few days big run up in the markets again has me thinking what if... It feels almost like last year where things are really high, but we're not sure whether we're only just starting the recovery, or if it's just some greed in the market. Then again here's a 2 year graph for the indi and divtrx which I intend to buy:

The divtrx is still 13% off it's high from May last year while the indi is about equal to that, but about 4% off it's October high. I guess I'll just go with the research and pull the trigger when the funds clear.

As for the miners, I'm about as confused as could be. Don't have the faintest idea what's going on there. It's not like our labour issues are anywhere near sorted, and commodity prices have a long way to go before I would have thought they'd make an impact. Another notch on my bedpost for not being able to pick shares I guess!
« Last Edit: March 04, 2016, 08:07:23 am by Patrick »

Mr_Dividend

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Re: Blog post: Should you be dollar cost averaging?
« Reply #4 on: March 08, 2016, 08:17:36 am »
After some thinking....

I would be selling shares to buy the ETF's, so have decided I am not in too much of a hurry - I probably would feel different if I had cash sitting in a bank account. My portfolio is back in the green after a year - so at it's "high" . I am just going to evaluate my holdings in my small account every few months or so, cull the weak, and transfer the money over. If it's gone lower, great. If it's higher, so should most of my shares.



czc

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Re: Blog post: Should you be dollar cost averaging?
« Reply #5 on: March 09, 2016, 05:41:41 pm »
So someone posted a link to smart dollar cost averaging on MMM. http://www.bnn.ca/News/2016/2/1/Larry-Berman-Smart-dollar-cost-averaging-.aspx

I know people say don't time the market, but...

Patrick

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Re: Blog post: Should you be dollar cost averaging?
« Reply #6 on: March 09, 2016, 08:42:06 pm »
So someone posted a link to smart dollar cost averaging on MMM. http://www.bnn.ca/News/2016/2/1/Larry-Berman-Smart-dollar-cost-averaging-.aspx

I know people say don't time the market, but...

Interesting, it sounds almost too easy, just buy on days when the market is down. But what would have happened if instead of dollar cost averaging they put their whole annual contribution in at the beginning of the year? Would smart DCA beat lump sum?

Ideally they would run all three options over every rolling 10 year period for all the months since 1926. I have a feeling the lump sum would still win on average, the smart dollar cost averaging would come second and dollar cost averaging third.

Anyone have a few months free to run the numbers  :D