Search found 1426 matches

by rbaldini
Sat Jun 20, 2020 10:08 am
Forum: Investing - Theory, News & General
Topic: Wiki - Dollar cost averaging: Disagreement with basic premise
Replies: 64
Views: 3176

Re: Wiki - Dollar cost averaging: Disagreement with basic premise

I see nothing wrong with the quoted section. I consider DCA to be logically inconsistent, but you cannot deny that the overall effect of DCA is to reduce the total amount of time in the market. ie a DCAer who gradually invests sums, over time, will hold less stock and more cash than a lump summer, ...
by rbaldini
Sat Jun 20, 2020 9:55 am
Forum: Investing - Theory, News & General
Topic: Wiki - Dollar cost averaging: Disagreement with basic premise
Replies: 64
Views: 3176

Re: Wiki - Dollar cost averaging: Disagreement with basic premise

I see nothing wrong with the quoted section. I consider DCA to be logically inconsistent, but you cannot deny that the overall effect of DCA is to reduce the total amount of time in the market. ie a DCAer who gradually invests sums, over time, will hold less stock and more cash than a lump summer, a...
by rbaldini
Wed Jun 17, 2020 5:41 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

I was fully invested in my desired AA of 65 stocks/30 bond/0 cash (not including EF)/0 gold/5 play in 2019 but my 2029 retirement AA was 40/40/10/5/5. I elect to "DCA" into the final AA by making incremental changes over 10 years. Am I forced to go to my retirement AA right now or be considered irr...
by rbaldini
Wed Jun 17, 2020 5:23 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

Your mistake is that you are looking at the money and not the person. The amounts of money are the same. The person is not. Your illogic is precisely this: calling a person with a windfall identical to a person who has accumulated money over time. You say "The point is that DCA treats money and ris...
by rbaldini
Wed Jun 17, 2020 5:06 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

You still didn't answer the question about what precisely is wrong with DCA'ing in. Your answer here is simply, well you can rebalance faster. So what? What's wrong with rebalancing slower? Suppose I say I want to buy some stock but I want to take my time. What horrible sin have I committed? I have...
by rbaldini
Wed Jun 17, 2020 4:41 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

How many times do I have to say sequence of returns risk? You can disagree that it’s a big deal, but it’s still real. You're talking about a different thing. Sequence of returns risk can be managed by employing a glide path between different allocations. Those are allocations you think about and ch...
by rbaldini
Wed Jun 17, 2020 4:29 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

How many times do I have to say sequence of returns risk? You can disagree that it’s a big deal, but it’s still real. Sequence of returns doesn't cease to exist in 6 months, or whatever your DCA time period is. If sequence of returns risk demands that you maintain a temporary AA below your desired ...
by rbaldini
Wed Jun 17, 2020 4:18 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

And as Beehave points out, the selection of a suitable AA is often largely emotional anyway. To argue that DCA is illogical because someone elects to do DCA is "weak willed" and "emotional" is silly. Are you "weak willed" or "emotional" if your allocation is anything but 100/0? The fact that you co...
by rbaldini
Wed Jun 17, 2020 4:17 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

I'll make this easy for you too. I said the difference is that a windfall of 10% of his total net worth is a lot different than a windfall of a 1000% of his total net worth. Strawman much? Also 6 weeks is a pretty short DCA. It's essentially a lump sum and normally fairly small difference in perfor...
by rbaldini
Wed Jun 17, 2020 4:15 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

Because 33% of the time dca is better off, 10% of the time you’re vastly better off one way or the other, and 90% of the time you’re only slightly better off one way or the other. See the breakdown of return differences in the vanguard paper. It’s really not all that clear cut why lump sum is bette...
by rbaldini
Wed Jun 17, 2020 3:58 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

DCA just says "I am ok with being fully invested in SOME asset allocation in 6 weeks (say), but not today, so I will hold some cash in the meantime and buy periodically". It doesn't imply anything about the selected AA. So I ask you: why is it ok for your new massive lump sum to be fully invested i...
by rbaldini
Wed Jun 17, 2020 3:35 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

What I don't get is what professed bogleheads don't get about a windfall and why all of a sudden that topic becomes one in which absolute do's and dont's apply when no boglehead typically chastises another for picking 40/60 vs. 50/50. Is the 40/60 "weak minded?" The DCA has been called in posts abo...
by rbaldini
Wed Jun 17, 2020 3:30 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

Okay I reread the OP. It should be restated as there's no difference between a large windfall and your current portfolio and both should be treated equally. Therefore, you should just lump sum it in at your current AA. Basically, yes. If someone instead says "I'm not comfortable with doing that rig...
by rbaldini
Wed Jun 17, 2020 3:28 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

And as Beehave points out, the selection of a suitable AA is often largely emotional anyway. To argue that DCA is illogical because someone elects to do DCA is "weak willed" and "emotional" is silly. Are you "weak willed" or "emotional" if your allocation is anything but 100/0? The fact that you co...
by rbaldini
Wed Jun 17, 2020 3:13 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

Okay I reread the OP. It should be restated as there's no difference between a large windfall and your current portfolio and both should be treated equally. Therefore, you should just lump sum it in at your current AA. Basically, yes. If someone instead says "I'm not comfortable with doing that rig...
by rbaldini
Wed Jun 17, 2020 3:11 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

Again, I don't think that's the point. The original post didn't say anything about lump sum "usually" being superior. The point is that DCA treats money and risk management in an illogical way, by supposing there is some difference between money you just received and money you've had for a while. I...
by rbaldini
Wed Jun 17, 2020 3:03 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

DCA is always worse. DCA wasn't worse in 2008. DCA is better 1/3 of the time. The fact that it's mathematically worse on average is immaterial if all you care about is avoiding severe left tail scenarios within a short time horizon. I think the point is that DCA is always the worse bet . We never g...
by rbaldini
Wed Jun 17, 2020 2:32 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

Lump sum has a higher expected return by virtue of the fact that 66% of the time, after 1 year, the lump sum outperforms DCA. Again, this is a distraction from the actual argument made by OP and others. That lump sum "usually wins" is a useful fact (although not surprising), but that is not why OP ...
by rbaldini
Wed Jun 17, 2020 2:11 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

Address the argument. The argument is that DCA makes the logical error of treating new money differently from old money, or, equivalently, that's ok to be fully invested with asset allocation X after some arbitrary time period after receiving a windfall, but not immediately after receiving it. Why?...
by rbaldini
Wed Jun 17, 2020 2:03 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

So why has DCA now become the whipping child? If the original point is really to explain that time in the market tends to outperform because the market tends to go up over time and the very best days tend to be better than the very worst days are bad - or use any other such statistical proof that l...
by rbaldini
Wed Jun 17, 2020 1:49 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

Why would anyone set logic at odds with empirical evidence or math? Not at odds. My point is... if the argument against DCA is logical, then one should address that logical argument. Nowhere in the original post was anything said about optimal investment strategies, expected return, risk vs. reward...
by rbaldini
Wed Jun 17, 2020 1:26 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

My impression is that all the virtual ink spilled about which method is superior or optimal is a massive waste of energy. OP’s claim (and the common critique of DCA) is logical rather than empirical or mathematical. It simply asserts that DCA treats “new” money different than “old” money, and that ...
by rbaldini
Wed Jun 17, 2020 1:09 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

My impression is that all the virtual ink spilled about which method is superior or optimal is a massive waste of energy. OP’s claim (and the common critique of DCA) is logical rather than empirical or mathematical. It simply asserts that DCA treats “new” money different than “old” money, and that n...
by rbaldini
Mon Jun 15, 2020 8:49 am
Forum: Investing - Theory, News & General
Topic: Sequence of return risk -- when is it most dangerous?
Replies: 34
Views: 1475

Re: Sequence of return risk -- when is it most dangerous?

Your logic is right, I think. The only difference I can see is that you are closer to death later in retirement, so your total need is reduced. I have never understood why this forum obsesses so much over SORR; it seems to me to be a contrived kind of risk. SORR says that given a known set of return...
by rbaldini
Sat Jun 13, 2020 8:21 am
Forum: Investing - Theory, News & General
Topic: Incredible Returns
Replies: 67
Views: 6127

Re: Incredible Returns

Ask to see his total net worth on the first of every month for the next five years. :happy
by rbaldini
Wed Jun 10, 2020 12:25 pm
Forum: Investing - Theory, News & General
Topic: Why is the stock market up? [thread multi-merge]
Replies: 521
Views: 21259

Re: Market makes no sense

After a decade of being a stable, passive investor, I'm tempted to time the market. Can someone help talk me off the ledge? I don't understand how we can have a recession with such massive unemployment, companies going bankrupt and closing stores, a likely virus resurgence leading to further decrea...
by rbaldini
Mon Jun 08, 2020 11:56 am
Forum: Personal Investments
Topic: Can someone explain to me how bonds could possibly be used for any sort of significant income or gains?
Replies: 50
Views: 3620

Re: Can someone explain to me how bonds could possibly be used for any sort of significant income or gains?

I hold bonds because I feel that being 100% stock is too risky. If there is a superior alternative to bonds for this purpose, let me know.
by rbaldini
Mon Jun 08, 2020 10:21 am
Forum: Investing - Theory, News & General
Topic: Going 100/0 to 52/48 Today (06/08/20) - Wish Me Luck
Replies: 51
Views: 5737

Re: Going 100/0 to 52/48 Today (06/08/20) - Wish Me Luck

Yes, future contributions are 100/0 to get my asset allocation back to a more reasonable level for my age. I’m “overshooting” because of the vintage nature of TIAA Traditional. I want all of it in the same vintage. Down the line once my AA is back to 70/30 or so I will have to ask myself what my ne...
by rbaldini
Thu Jun 04, 2020 2:59 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

If I had a windfall of $1.7 million I would very likely adjust my AA. I am currently 75/25 working part time and more or less financially independent. $1.7 million would make a nice addition and alter my need and desire to take additional risk. I would likely go to a 60/40. Like you I would probabl...
by rbaldini
Thu Jun 04, 2020 2:40 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

If I had a windfall of $1.7 million I would very likely adjust my AA. I am currently 75/25 working part time and more or less financially independent. $1.7 million would make a nice addition and alter my need and desire to take additional risk. I would likely go to a 60/40. Like you I would probabl...
by rbaldini
Wed Jun 03, 2020 1:59 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]

Whenever possible, avoid making sudden, large financial transactions. Sure. You can construct a rule that can probably render any behavior rational. There remains the question why a person who just received, say, a windfall of 10% of their total net worth (i.e. not trivial), SHOULD NOT be okay with...
by rbaldini
Wed Jun 03, 2020 9:21 am
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used

You say it isn’t the point but that is precisely the point of DCA. If you suddenly won 1,000,000$ tomorrow even though you might want to invest it for the long haul and adopt a buy and hold strategy, you are deluding yourself if you think you wouldn’t second guess dumping it all in right now amidst...
by rbaldini
Tue Jun 02, 2020 3:33 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used

As I explained before, when you are DCA you are purchasing peace of mind. It is not a maximalist strategy for achieving returns. There may be strategies that result in higher returns, but not everyone needs to pursue them. If the only strategies that are rational according to you are the ones that ...
by rbaldini
Tue Jun 02, 2020 9:16 am
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used

There are also those who think that the market is irrational and overvalued. But they aren't 100% sure, so they DCA. What if they think the market is still irrational and overvalued after DCAing all the money in? Should they pull the sum back out and re-DCA it? Same conditions should prompt the sam...
by rbaldini
Mon Jun 01, 2020 9:29 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used

Agreed. DCA says "I'm ok with money I've had for a while being fully invested right now. But I am not okay with money I just received being fully invested right now - in fact, I won't be ok with that for another 6 months (or whatever)" The fallacy lies in the fact that there is no real difference be...
by rbaldini
Mon Jun 01, 2020 9:24 pm
Forum: Investing - Theory, News & General
Topic: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used [vs. lump sum]
Replies: 760
Views: 34244

Re: Why Dollar Cost Averaging (DCA) is a mental accounting bias and should never be used

celia wrote:
Mon Jun 01, 2020 9:13 pm
OP, Do you automatically re-invest dividends in any of your accounts? Isn’t that DCA-ing?
No. It's putting the money back into the market as soon as it becomes available. It is lump-summing.
by rbaldini
Sat May 30, 2020 5:07 pm
Forum: Investing - Theory, News & General
Topic: Correlation of every stock in the S&P with the index itself
Replies: 9
Views: 978

Re: Correlation of every stock in the S&P with the index itself

I've found some online tools that show the correlation of individual S&P stocks with the index itself but is there any tool out there that shows the standard deviation of the correlation of every stock in the S&P with the index itself (because I assume the average would always be 1) - basically jus...
by rbaldini
Fri May 29, 2020 9:40 am
Forum: Personal Finance (Not Investing)
Topic: Simple jobs during FATFire?
Replies: 152
Views: 10423

Re: Simple jobs during FATFire?

How is FATfire different from FIRE? https://www.financialsamurai.com/what-is-fat-fire-best-way-to-retire-early/ Fat FIRE allows you to: * Live in the most expensive cities in the world which all have wonderful culture, food, nightlife, entertainment, schools, and arts * Live in a comfortable house ...
by rbaldini
Fri May 29, 2020 9:30 am
Forum: Personal Finance (Not Investing)
Topic: Simple jobs during FATFire?
Replies: 152
Views: 10423

Re: Simple jobs during FATFire?

How is FATfire different from FIRE? https://www.financialsamurai.com/what-is-fat-fire-best-way-to-retire-early/ Fat FIRE allows you to: * Live in the most expensive cities in the world which all have wonderful culture, food, nightlife, entertainment, schools, and arts * Live in a comfortable house ...
by rbaldini
Wed May 27, 2020 10:16 am
Forum: Investing - Theory, News & General
Topic: Are we better off now than Dec 2018?
Replies: 264
Views: 20694

Re: Are we better off now than Dec 2018?

I personally am.
by rbaldini
Mon May 25, 2020 2:22 pm
Forum: Investing - Theory, News & General
Topic: Anyone screwed up timing the market?
Replies: 94
Views: 8785

Re: Anyone screwed up timing the market?

I got out in march, saw the market drop further and then rise, rise, rise and now, if the market doesn´t come down again, I have missed the boat :oops: Anyone else who learned not to time the market? n=1. Maybe you're actually a great market timer, but just happened to get unlucky this time! Tongue...
by rbaldini
Mon May 25, 2020 2:10 pm
Forum: Personal Investments
Topic: I have no risk tolerance: where am I supposed to keep my money?
Replies: 73
Views: 6777

Re: I have no risk tolerance: where am I supposed to keep my money?

Historically, 100% bonds is actually more volatile than having a small amount of stock, because it adds uncorrelated diversification. Something like 90% bonds, 10% stock. This is a very sudden change to a very conservative portfolio, though. It's obviously market timing. Even retirees often hang out...
by rbaldini
Mon May 25, 2020 1:49 pm
Forum: Investing - Theory, News & General
Topic: Anybody do any GOOD timing the market?
Replies: 123
Views: 7957

Re: Anybody do any GOOD timing the market?

Between March 25 and March 27 I sold all of my Treasuries (VFIUX) and bought investment grade corporates (VFIDX) with the proceeds. Over the ensuing 8 weeks VFIUX returned 54 basis points, while VFIDX returned 613 basis points. I learned that trick in 2008 - and it worked again in 2020. I wonder ho...
by rbaldini
Sun May 24, 2020 1:01 pm
Forum: Personal Finance (Not Investing)
Topic: What do people spend money on?
Replies: 52
Views: 5246

Re: What do people spend money on?

Are you asking us to suggest hobbies for you?
by rbaldini
Sun May 24, 2020 12:21 pm
Forum: Personal Investments
Topic: Dollar Cost Averaging - How long?
Replies: 14
Views: 1286

Re: Dollar Cost Averaging - How long?

Just go all in now. If that sounds scary, pick an asset allocation that doesn't sound scary. Done. No market timing necessary.
by rbaldini
Fri May 22, 2020 10:07 pm
Forum: Personal Investments
Topic: Does larger portfolio make one more or less risk tolerant
Replies: 25
Views: 2045

Re: Does larger portfolio make one more or less risk tolerant

More wealth make you more risk tolerant. You can literally tolerate more loss without going broke.

On the other hand, you have less need to take risk. So you might elect to invest more conservatively anyway.
by rbaldini
Fri May 22, 2020 9:25 pm
Forum: Personal Finance (Not Investing)
Topic: Financial advice for undertaking a PhD
Replies: 47
Views: 3183

Re: Financial advice for undertaking a PhD

Depending on the PhD program, funding it might be relatively easy. I did lots of TA-ships for mine, which paid for tuition plus a small stipend. Then there are research grants, etc.

The bigger downside is the opportunity cost: you probably won't be making or saving much money.