Lump sum vs Dollar Cost Averaging during volatile market

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abhi764
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Lump sum vs Dollar Cost Averaging during volatile market

Post by abhi764 » Thu May 28, 2020 3:15 pm

I recently started investing in Index Funds and building a portfolio with VTSAX, VBTLX, etc. I have a large sum of cash for investment (say about 100K). I understand that probabilistically, LumpSum outperforms DCA by about 2.3% over 10 year period. But there is a psychological comfort that DCA provides, which can't be quantified easily.

Given the market is so volatile right now due to Covid, how would you recommend I go about investing the large cash?

1) Go lump sum and hope for the best?
2) DCA over say 1 year, once every quarter?
3) Something else?

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by MotoTrojan » Thu May 28, 2020 3:19 pm

Emotions matter but logic says lump-sum. If you do want to succumb to emotions I would lump-sum half of it, and DCA the rest over a short time-span (6 months). Lump-summing some of it today is the safest bet emotionally, as then you won't be kicking yourself (as bad) if the market charges upward from Day 1.

If you had $100K (or even $10M) in a 401k which you had saved up diligently over 25 years, and was mostly gains, would you move that to cash and re-DCA it into the market today? If not, then doing so with this new money would be hypocritical.

Every day you stay invested, you are deciding to lump-sum.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by livesoft » Thu May 28, 2020 3:31 pm

It doesn't matter what you do, but if this was a day like March 16, 2020, then I surely would have lump-summed it in on that. Did you have the cash on March 16? Or March 18? Or April 1?

Is this cash 1% of the amounts you have invested already? 10%? 50%? More than 100%? How long until you need this money?
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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by abhi764 » Thu May 28, 2020 4:47 pm

livesoft wrote:
Thu May 28, 2020 3:31 pm
It doesn't matter what you do, but if this was a day like March 16, 2020, then I surely would have lump-summed it in on that. Did you have the cash on March 16? Or March 18? Or April 1?
Would you have done all lump sum on March 16th with the amount of information available till that day? Or would you have waited for the market to drop further? Won't DCA be a better strategy in a falling market, because you don't know how much more it will fall?
livesoft wrote:
Thu May 28, 2020 3:31 pm
Is this cash 1% of the amounts you have invested already? 10%? 50%? More than 100%? How long until you need this money?
This cash is about 25% of my amounts already invested in. So it's significant in that sense. Originally, I was hoping to use this money for buying a house, and/or some real estate investment. I have been reading about RE, and it seems a bit more involved so I am not sure we'll do RE. My prime goal is Financial Independence within next 10 years, and then rely on Safe Withdrawal Limit of 4% or something to sustain myself.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by retired@50 » Thu May 28, 2020 4:51 pm

abhishekprateek wrote:
Thu May 28, 2020 4:47 pm

Would you have done all lump sum on March 16th with the amount of information available till that day? Or would you have waited for the market to drop further? Won't DCA be a better strategy in a falling market, because you don't know how much more it will fall?
Since one never knows if or when a market will stop falling, it's impossible to come up with a satisfying answer.

I suggest you invest in a way that will minimize your future regret.

Regards,
This is one person's opinion. Nothing more.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by livesoft » Thu May 28, 2020 4:52 pm

.....
Last edited by livesoft on Thu May 28, 2020 4:54 pm, edited 1 time in total.
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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by livesoft » Thu May 28, 2020 4:52 pm

abhishekprateek wrote:
Thu May 28, 2020 4:47 pm
Would you have done all lump sum on March 16th with the amount of information available till that day? Or would you have waited for the market to drop further? Won't DCA be a better strategy in a falling market, because you don't know how much more it will fall?
I definitely would have lump-summed and definitely did rebalance by exchanging a multiple of $100,000 from a bond fund to VTI on March 16 and 18. See also: viewtopic.php?f=10&t=311448
livesoft wrote:
Thu May 28, 2020 3:31 pm
Is this cash 1% of the amounts you have invested already? 10%? 50%? More than 100%? How long until you need this money?
This cash is about 25% of my amounts already invested in. So it's significant in that sense. Originally, I was hoping to use this money for buying a house, and/or some real estate investment. I have been reading about RE, and it seems a bit more involved so I am not sure we'll do RE. My prime goal is Financial Independence within next 10 years, and then rely on Safe Withdrawal Limit of 4% or something to sustain myself.
I moved about 25% of my bond allocation into equities the week of March 16th.

So it looks like you have to make your own decision, doesn't it?
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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by RonSwanson » Thu May 28, 2020 4:52 pm

Nobody knows if the market is falling because that implies some knowledge of the future. We only know what has happened so far.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by nigel_ht » Thu May 28, 2020 5:14 pm

DCA wins a third of the time, lump sum the rest. The median drag on performance for DCA and lump sum is relatively minor...read the vanguard white paper for details.

I would (and am) doing a 12 month DCA once per month. I modified it to just doing the stock half of my current 50/50 allocation and holding cash rather than buy bonds.

There is volatility and uncertainty in the markets and in the economy so I want more cash than I would normally hold.

The thing about selling all your stock and DCAing back in is a bit of Apples and Oranges to me. The tax implications of doing that can be quite high so the scenarios aren’t equivalent. In any case I tend to follow the rule of thumb to never be less than 20% in the stock market...so if you aren’t 20% in you might lump sum in enough to be that much in and then DCA the remainder over 12 months.

Given its 25% of your existing portfolio I suspect you already are in enough. It also meets the other rule of thumb I read somewhere if the new money is less than 5% of your portfolio to just lump sum it rather than deal with the hassle of DCA.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by 7eight9 » Thu May 28, 2020 5:22 pm

When you go to the casino you probably don't go to the first dice table you see and put your entire bankroll on the pass line (or come if a point has already been established). Maybe you walk around checking out the action and decide that tonight isn't the night to play.

Maybe you don't put it in the market at all. Or you wait a while. If all it did in the interim was merely keep up with inflation would that derail your future plans?
I guess it all could be much worse. | They could be warming up my hearse.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by Toons » Thu May 28, 2020 5:59 pm

Lump Sum
Time
Not Timing
Stop listening to the daily noise.
:happy
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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by whereskyle » Thu May 28, 2020 6:11 pm

retired@50 wrote:
Thu May 28, 2020 4:51 pm
abhishekprateek wrote:
Thu May 28, 2020 4:47 pm

Would you have done all lump sum on March 16th with the amount of information available till that day? Or would you have waited for the market to drop further? Won't DCA be a better strategy in a falling market, because you don't know how much more it will fall?
Since one never knows if or when a market will stop falling, it's impossible to come up with a satisfying answer.

I suggest you invest in a way that will minimize your future regret.

Regards,
But it's impossible to know in advance which of the two approaches will result in regret!
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by whereskyle » Thu May 28, 2020 6:11 pm

Toons wrote:
Thu May 28, 2020 5:59 pm
Lump Sum
Time
Not Timing
Stop listening to the daily noise.
:happy
+1
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by Triple digit golfer » Thu May 28, 2020 6:12 pm

Why was this cash not invested already? Did you just come into it?

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by whereskyle » Thu May 28, 2020 6:15 pm

abhishekprateek wrote:
Thu May 28, 2020 3:15 pm
I recently started investing in Index Funds and building a portfolio with VTSAX, VBTLX, etc. I have a large sum of cash for investment (say about 100K). I understand that probabilistically, LumpSum outperforms DCA by about 2.3% over 10 year period. But there is a psychological comfort that DCA provides, which can't be quantified easily.

Given the market is so volatile right now due to Covid, how would you recommend I go about investing the large cash?

1) Go lump sum and hope for the best?
2) DCA over say 1 year, once every quarter?
3) Something else?
There is no way to know which approach will result in regret. Do not pretend that you can know, and do what you should always do: put as much $ as you can spare to invest into broadly diversified, total-market index funds as soon as you can. Put your money to work now, not later, and remember the story of the investor who buys the market only immediately before stock market crashes but never sells his investment: he ends up rich.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by retired@50 » Thu May 28, 2020 6:36 pm

whereskyle wrote:
Thu May 28, 2020 6:11 pm
retired@50 wrote:
Thu May 28, 2020 4:51 pm
abhishekprateek wrote:
Thu May 28, 2020 4:47 pm

Would you have done all lump sum on March 16th with the amount of information available till that day? Or would you have waited for the market to drop further? Won't DCA be a better strategy in a falling market, because you don't know how much more it will fall?
Since one never knows if or when a market will stop falling, it's impossible to come up with a satisfying answer.

I suggest you invest in a way that will minimize your future regret.

Regards,
But it's impossible to know in advance which of the two approaches will result in regret!
My advice was predicated on the fact the the investor knows himself better than anyone in this forum. If that's not true then there could be different issues at play. :shock:

Regards,
This is one person's opinion. Nothing more.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by Ben Mathew » Thu May 28, 2020 6:56 pm

It's not just that lump sum beats DCA statistically. It's also that DCA'ing does not hold together logically. If you had $100K already invested in the market, would you sell everything and then DCA the money back in once a quarter over the next one year? If not, why would you do it when your money is not invested?

Putting aside tax and transaction costs, the only difference between you with $100K in cash and you with $100K in stocks is pressing the buy/sell button. If DCA'ing is optimal when you are holding $100K in cash, then selling and DCA'ing should also be optimal when you are holidng $100K in stocks.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by whereskyle » Thu May 28, 2020 7:07 pm

retired@50 wrote:
Thu May 28, 2020 6:36 pm
whereskyle wrote:
Thu May 28, 2020 6:11 pm
retired@50 wrote:
Thu May 28, 2020 4:51 pm
abhishekprateek wrote:
Thu May 28, 2020 4:47 pm

Would you have done all lump sum on March 16th with the amount of information available till that day? Or would you have waited for the market to drop further? Won't DCA be a better strategy in a falling market, because you don't know how much more it will fall?
Since one never knows if or when a market will stop falling, it's impossible to come up with a satisfying answer.

I suggest you invest in a way that will minimize your future regret.

Regards,
But it's impossible to know in advance which of the two approaches will result in regret!
My advice was predicated on the fact the the investor knows himself better than anyone in this forum. If that's not true then there could be different issues at play. :shock:

Regards,
Good point. Still, I think the main driver of regret is which way the market goes after the investor invests. Happy if it goes up after a lump sum, sad if it does not. We as investors need to accept that we cannot know whether the market will go up or down. It seems the chance OP will be happy with his choice is 50/50 either way. So perhaps there just needs to be a different way of thinking about this problem. Total-market investing enables us to survive and ultimately profit from the risks presented by stock-market volatility. If one wants to take a hands-off, fully invested approach, as recommended by Jack Bogle, I think one embraces the possibility that he will buy right before a dip or even a crash, and that despite this, he will come out ahead in the end, so long as he holds on for a reasonable amount of time. I think investing advice inspired by Jack Bogle supports an investor investing as much as he is willing to put at risk as soon as he can. So OP should decide if he wants to risk $100k or not. That's the question.
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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by magicrat » Thu May 28, 2020 8:55 pm

If you are set on DCA then I suggest 99% tomorrow and 1% Monday.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by nigel_ht » Thu May 28, 2020 9:21 pm

Ben Mathew wrote:
Thu May 28, 2020 6:56 pm
It's not just that lump sum beats DCA statistically. It's also that DCA'ing does not hold together logically. If you had $100K already invested in the market, would you sell everything and then DCA the money back in once a quarter over the next one year? If not, why would you do it when your money is not invested?

Putting aside tax and transaction costs, the only difference between you with $100K in cash and you with $100K in stocks is pressing the buy/sell button. If DCA'ing is optimal when you are holding $100K in cash, then selling and DCA'ing should also be optimal when you are holidng $100K in stocks.
The reason you don’t do this IS because of tax and transaction costs. Also because lump sum does win 2/3rds of the time.

The reason to DCA is because of the current volatility increases the odds of being in that 1/3 of the time scenario where lump sum wins.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by grabiner » Fri May 29, 2020 9:21 am

nigel_ht wrote:
Thu May 28, 2020 9:21 pm
The reason you don’t do this IS because of tax and transaction costs. Also because lump sum does win 2/3rds of the time.

The reason to DCA is because of the current volatility increases the odds of being in that 1/3 of the time scenario where lump sum wins.
DCA outperforms lump sum when the market declines after you start investing. The current volatility doesn't make it any more likely the market will decline over the next few months; however, it does make it more likely that any declines (or increases) will be large.

This enhances the psychological argument for DCA. If you put a lot of money into the market, and it loses a third of its value immediately (which is what happened if you started investing in February), how will you react? You don't know, because you haven't actually gained or lost such large amounts of money. But if you move in gradually, the dollar changes in your portfolio will also increase gradually.
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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by whereskyle » Fri May 29, 2020 9:41 am

abhishekprateek wrote:
Thu May 28, 2020 3:15 pm
I recently started investing in Index Funds and building a portfolio with VTSAX, VBTLX, etc. I have a large sum of cash for investment (say about 100K). I understand that probabilistically, LumpSum outperforms DCA by about 2.3% over 10 year period. But there is a psychological comfort that DCA provides, which can't be quantified easily.

Given the market is so volatile right now due to Covid, how would you recommend I go about investing the large cash?

1) Go lump sum and hope for the best?
2) DCA over say 1 year, once every quarter?
3) Something else?
I vote something else. The truth is that this debate is silly. If the market goes up after you lump sum you'll be happy. If the market goes down after you lump sum, you'll be sad. The inverse is true for DCA. Because you have no control over how the market will move after you make your decision, deciding between lump sum and DCA gives you no power at all. You are at the mercy of the market just as all of us are. This is why the only real question here is how much money you want to expose to market risk. Decide how much $ you want to put at risk, and put that $ into the market as soon as you decide.

The truth is that you have had an influx of $100k in cash, and now the only thing that you can control is how you allocate your assets. I'll say it again: THE ONLY THING YOU CONTROL IS ASSET ALLOCATION. If you DCA, you're really just holding a bigger cash position, so what you should do is:

1. Look at your portfolio.
2. Determine your desired asset allocation.
3. Invest accordingly.

You should do this and redo this periodically. An influx of $100k is a good time to reassess. Determine your desired asset allocation and invest accordingly. Don't pretend that choosing between DCA and lump-sum can improve your odds one way or the other. The only thing you can control is how you allocate your assets at any given time in accordance with your ability and desire to take risk. That's the only question you should be considering.

Good luck!
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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by JLJL » Fri May 29, 2020 9:46 am

livesoft wrote:
Thu May 28, 2020 3:31 pm
It doesn't matter what you do, but if this was a day like March 16, 2020, then I surely would have lump-summed it in on that. Did you have the cash on March 16? Or March 18? Or April 1?

<snip>
Agreed. Caution though that In deploying this strategy which could be a good one to combat regret (can't fault myself for buying after such a historically bad day), you need to know that you really should watch the markets daily to see how they are moving, so you can do the transaction toward the end of the trading day, before 4pm the day of the bad stuff happens.

Buying index/mutual funds will transact at the close price for that day (or Monday close if you trade after 4pm on Friday). So if Monday the 16th drops 3000 pts but you make the trade that night after the drop and after close, you will get the price at Tuesday's close which very well could have heavily rebounded. On the 17th I don't think it did so it's maybe a low risk, but to really take advantage, keep your eye out for an epically bad day brewing, and at 3:45pm or whatever (yes things can move plenty in last half hour) make the transactions to limit risk of a rebound the next day.

This strategy will potentially have you watching markets constantly and daily and dreading/regretting up days and praying for RBDs, and you could miss a long run-up if none materialize.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by livesoft » Fri May 29, 2020 9:51 am

JLJL wrote:
Fri May 29, 2020 9:46 am
..., you need to know that you really should watch the markets daily to see how they are moving, so you can do the transaction toward the end of the trading day, before 4pm the day of the bad stuff happens.

[...]

This strategy will potentially have you watching markets constantly and daily and ...
There is absolutely no need to watch the markets daily for a big drop because one can tell their broker to alert one via text or e-mail when there is a big drop. So one can blissfully live life unaware that a big drop has happened until they get the text message or e-mail indicating that. Of course, it does means that one has a cell phone and that the cell phone is turned on in an area where there is a cell signal.
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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by sojersey » Fri May 29, 2020 9:58 am

Well, I can say that I have lump sum'd my Roth IRA twice now and have regretted it both times :D

Both ended up being right before a huge unsuspected drop - including this January, our current year of COVID -- this was on top of more gradual but large summing some excess cash from my emergency fund December -> Feb in my taxable :oops:

So I would say, I will be shying away from going full lump myself to avoid the emotional turmoil of being struck twice now hah… maybe do the half lump half DCA (my original plan even before I talked myself out of it as I was telling others the stats about lump vs DCA).

In the end, it's all an emotional rollercoaster so I'd say if you're susceptible to emotions wearing you down just DCA and if you can ignore when you get it wrong (maybe I'll try again next January… sigh) lump.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by JLJL » Fri May 29, 2020 9:59 am

livesoft wrote:
Fri May 29, 2020 9:51 am
JLJL wrote:
Fri May 29, 2020 9:46 am
..., you need to know that you really should watch the markets daily to see how they are moving, so you can do the transaction toward the end of the trading day, before 4pm the day of the bad stuff happens.

[...]

This strategy will potentially have you watching markets constantly and daily and ...
There is absolutely no need to watch the markets daily for a big drop because one can tell their broker to alert one via text or e-mail when there is a big drop. So one can blissfully live life unaware that a big drop has happened until they get the text message or e-mail indicating that. Of course, it does means that one has a cell phone and that the cell phone is turned on in an area where there is a cell signal.
and a broker haha

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by jand87 » Fri May 29, 2020 10:06 am

I think it depends on the source of funds and the timing. As someone else said, time, not timing. I will assume you don't need the money for many years, so just lump sum. The market will go down again. It will also go back up over TIME.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by livesoft » Fri May 29, 2020 10:25 am

JLJL wrote:
Fri May 29, 2020 9:59 am
and a broker haha
Perhaps I should have written "financial institution" since Vanguard and others will happily do this for you.
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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by WhiteMaxima » Fri May 29, 2020 10:29 am

Not much of difference.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by nigel_ht » Fri May 29, 2020 10:48 am

grabiner wrote:
Fri May 29, 2020 9:21 am
nigel_ht wrote:
Thu May 28, 2020 9:21 pm
The reason you don’t do this IS because of tax and transaction costs. Also because lump sum does win 2/3rds of the time.

The reason to DCA is because of the current volatility increases the odds of being in that 1/3 of the time scenario where lump sum wins.
DCA outperforms lump sum when the market declines after you start investing. The current volatility doesn't make it any more likely the market will decline over the next few months; however, it does make it more likely that any declines (or increases) will be large.

This enhances the psychological argument for DCA. If you put a lot of money into the market, and it loses a third of its value immediately (which is what happened if you started investing in February), how will you react? You don't know, because you haven't actually gained or lost such large amounts of money. But if you move in gradually, the dollar changes in your portfolio will also increase gradually.
The high unemployment, economic difficulties, lower GDP, lower consumer spending, disrupted supply chains, etc indicate that earnings through 2020 will be "challenged".

This is a stark difference to say 2019 when none of these things were going on. So the probability of declines in the stock market in 2020 is higher than normal so the probability of DCA outperforming lump sum is also more favorable than normal right now at 3000.

When the market was down 30% in March I'd say that lump sum made more sense given the odds the drop would not go much deeper than 50%.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by nigel_ht » Fri May 29, 2020 10:53 am

livesoft wrote:
Fri May 29, 2020 9:51 am
JLJL wrote:
Fri May 29, 2020 9:46 am
..., you need to know that you really should watch the markets daily to see how they are moving, so you can do the transaction toward the end of the trading day, before 4pm the day of the bad stuff happens.

[...]

This strategy will potentially have you watching markets constantly and daily and ...
There is absolutely no need to watch the markets daily for a big drop because one can tell their broker to alert one via text or e-mail when there is a big drop. So one can blissfully live life unaware that a big drop has happened until they get the text message or e-mail indicating that. Of course, it does means that one has a cell phone and that the cell phone is turned on in an area where there is a cell signal.
You can also do a GTC purchase for a big drop. That way you don't miss a buying opportunity between DCA purchases without a lot of vigilance.

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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by livesoft » Fri May 29, 2020 10:59 am

nigel_ht wrote:
Fri May 29, 2020 10:53 am
You can also do a GTC purchase for a big drop. That way you don't miss a buying opportunity between DCA purchases without a lot of vigilance.
I would not advocate that because that is a buy limit order and stale limit orders are not good for you. One should use their brain. Once again, get the text or e-mail about about a big drop and then decide what to do. Don't let a computer automatically do your thinking for you --- unless you are using a balanced fund that does the thinking for you.
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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by ruralavalon » Fri May 29, 2020 11:07 am

abhishekprateek wrote:
Thu May 28, 2020 3:15 pm
I recently started investing in Index Funds and building a portfolio with VTSAX, VBTLX, etc. I have a large sum of cash for investment (say about 100K). I understand that probabilistically, LumpSum outperforms DCA by about 2.3% over 10 year period. But there is a psychological comfort that DCA provides, which can't be quantified easily.

Given the market is so volatile right now due to Covid, how would you recommend I go about investing the large cash?

1) Go lump sum and hope for the best?
2) DCA over say 1 year, once every quarter?
3) Something else?
My suggestion is do the lump sum investment, based on the probabilities. Get it over with and get on with life.

The compromise solution is part in a lump sum, the remainder in stages. For example 50% in a lump sum now, the rest at 10% per month for the next 5 months. Use a predetermined date of the month, don't needlessly agonize over when the best time to buy might be.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

nigel_ht
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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by nigel_ht » Fri May 29, 2020 12:37 pm

livesoft wrote:
Fri May 29, 2020 10:59 am
nigel_ht wrote:
Fri May 29, 2020 10:53 am
You can also do a GTC purchase for a big drop. That way you don't miss a buying opportunity between DCA purchases without a lot of vigilance.
I would not advocate that because that is a buy limit order and stale limit orders are not good for you. One should use their brain. Once again, get the text or e-mail about about a big drop and then decide what to do. Don't let a computer automatically do your thinking for you --- unless you are using a balanced fund that does the thinking for you.
Lol...if my GTCs ever get filled I'll know because the US Stock In Free Fall thread will be imploding.

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Randtor
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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by Randtor » Sat May 30, 2020 8:59 am

I had this same issue this week having sold a piece of real estate and the cash was transferred to my account at VG. I agonized all week about how and when to invest, and what to invest in (it all had to go in taxable). I wrestled with the decisions all week then realized how much it was affecting my life. I recognize that it may go up...OR it may go down. But eventually it will go up (historically). No matter what,if I put it all in now or with DCA there was no guarantee either way would work better. I chose mental stability... I put it all in and I feel so much better. Regardless of what it does over the next week or month, it is a long term hold. As mentioned, : “Time in the market, not Timing the market.”
Best of luck.
"Whats done is done, and can't be undone"

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abhi764
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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by abhi764 » Tue Jun 02, 2020 5:41 pm

Randtor wrote:
Sat May 30, 2020 8:59 am
I had this same issue this week having sold a piece of real estate and the cash was transferred to my account at VG. I agonized all week about how and when to invest, and what to invest in (it all had to go in taxable). I wrestled with the decisions all week then realized how much it was affecting my life. I recognize that it may go up...OR it may go down. But eventually it will go up (historically). No matter what,if I put it all in now or with DCA there was no guarantee either way would work better. I chose mental stability... I put it all in and I feel so much better. Regardless of what it does over the next week or month, it is a long term hold. As mentioned, : “Time in the market, not Timing the market.”
Best of luck.
Thanks for sharing your experience, I can resonate with it. I too decided to take the plunge and went lump sum yesterday. It sure is a relief. I just hope for best now and not follow financial news :)

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ruralavalon
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Re: Lump sum vs Dollar Cost Averaging during volatile market

Post by ruralavalon » Tue Jun 02, 2020 6:11 pm

abhi764 wrote:
Tue Jun 02, 2020 5:41 pm
Randtor wrote:
Sat May 30, 2020 8:59 am
I had this same issue this week having sold a piece of real estate and the cash was transferred to my account at VG. I agonized all week about how and when to invest, and what to invest in (it all had to go in taxable). I wrestled with the decisions all week then realized how much it was affecting my life. I recognize that it may go up...OR it may go down. But eventually it will go up (historically). No matter what,if I put it all in now or with DCA there was no guarantee either way would work better. I chose mental stability... I put it all in and I feel so much better. Regardless of what it does over the next week or month, it is a long term hold. As mentioned, : “Time in the market, not Timing the market.”
Best of luck.
Thanks for sharing your experience, I can resonate with it. I too decided to take the plunge and went lump sum yesterday. It sure is a relief. I just hope for best now and not follow financial news :)
Good decision :) .
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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