Why is simple Dollar Cost Averaging still the king of all investment strategies? – Analyzing the last 3 decades of stock market data to find the best DCA strategy

Read the Story

Show Top Comments

In other words, just get your money in ASAP because the market keeps rising over time, and waiting for drops mean you miss the rises in the meantime.


Thanks for sharing, it’s always good to see exactly what kind of difference these different strategies actually make with some examples like this. Side-note, wouldn’t what Average Joe is doing be considered lump sum investments rather than DCA? Also, how easy is it to adjust things now that you have all of this pulled together? Any chance we could see (or at least get the end-result numbers) how Average Joe would do investing say $2k annually by making one annual investment vs. spreading it evenly throughout the year each month? I’m curious about maxing out a Roth IRA all at once vs. throughout the year and I think this would give a rough idea (without having to deal with the maximum limit changing throughout the years). I’m assuming the lump sum once annually would give the best results, but I have no idea by how much.


You not only have to dollar cost average, but also shift your portfolio to less aggressive investments the closer you are to needing your savings (ie retirement). That helps protect from a sudden crash or correction just about the time you want to enjoy all that money you earned.


Well but we haven’t had a real recession since 08. If there’s a big crash cautious Charlie will outplay them all


Hi, average joe here, I add to my investments weekly, since I get paid weekly, BUT I only add to my positions that are red on that given day. So if my AAPL is up, and my FB is down, I buy FB. So pretty much average joe thinking but buying the dips. It’s done me pretty well lol. I would imagine it gets me a couple more percent in the long run than average joe as stated in op. Would be interesting to see you run the same analysis on a weekly basis for Spy but choosing a red day each time.