Row 65905

Row ID: 65905 | Dataset Entry | Axioma AXP Content Repository

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DCA is a losing bet most of the time. If you look around, you can find some math around historical stock market data showing that lump sum beats DCA in something like 80% of market days.

However, DCA can be massively beneficial to your stress/mental health. If you lump sum and the market takes even a trivial dive, the anxiety and urge to pull out immediately is strong. We aren't unfeeling trading machines, and pretending that investing doesn't have an emotional component leads people to make decisions far worse than taking the relatively minor inefficiency of DCA.

So, yeah, I'd recommend DCA. If the market lags or drops, you'll make money. If the market continues to rise, you'll get to feel good watching the number go up every time you buy. In 30 years the difference to your net worth will be completely irrelevant either way, so the important thing now is to invest *at all*, and the best decision is the one that keeps you doing it, not the one that maximizes returns by end of year.

FieldValue
text DCA is a losing bet most of the time. If you look around, you can find some math around historical stock market data showing that lump sum beats DCA in something like 80% of market days. However, DCA can be massively beneficial to your stress/mental health. If you lump sum and the market takes even a trivial dive, the anxiety and urge to pull out immediately is strong. We aren't unfeeling trading machines, and pretending that investing doesn't have an emotional component leads people to make…
label r/investing
dataType comment
communityName r/investing
datetime 2024-05-23
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{
  "text": "DCA is a losing bet most of the time.  If you look around, you can find some math around historical stock market data showing that lump sum beats DCA in something like 80% of market days.\n\nHowever, DCA can be massively beneficial to your stress/mental health.  If you lump sum and the market takes even a trivial dive, the anxiety and urge to pull out immediately is strong.  We aren't unfeeling trading machines, and pretending that investing doesn't have an emotional component leads people to make decisions far worse than taking the relatively minor inefficiency of DCA.\n\nSo, yeah, I'd recommend DCA.  If the market lags or drops, you'll make money.  If the market continues to rise, you'll get to feel good watching the number go up every time you buy.  In 30 years the difference to your net worth will be completely irrelevant either way, so the important thing now is to invest *at all*, and the best decision is the one that keeps you doing it, not the one that maximizes returns by end of year.",
  "label": "r/investing",
  "dataType": "comment",
  "communityName": "r/investing",
  "datetime": "2024-05-23",
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