Comments on: Duking it out: lump sum investing vs. dollar cost averaging

By: bluntmoney

bluntmoney — Sun, 14 Sep 2008 16:45:56 +0000

Aduka, I’m barely getting started with investing at all, so I’m probably not one to ask for advice. If the market was not fluctuating at all, I wouldn’t see any reason to dollar cost average IF it was between DCA & lump sum investing. But when does the market not fluctuate? I think a regular savings plan is always a good thing to have, regardless of market conditions. (Assuming you mean as opposed to a regular investing plan.) Not sure what you’re asking about money market.

By: aduka

aduka — Sun, 14 Sep 2008 14:41:33 +0000

i want to ask you some quesstion/
if the market are not flauate for the current situation y political isuues ,waht is the best ways to used?
1-DCA
2-regular saving plan
3-money market

By: Rick Francis

Rick Francis — Wed, 12 Mar 2008 21:33:56 +0000

There is no way to know which option is going to be better, until after it’s too late! If you have the money available now and it isn’t a huge % of your total portfolio I would go with the lump sum- especially if you have any fixed transaction costs. Use the lump sum to rebalance your portfolio- that should help prevent buying something that is relatively too high.
If you were dealing with a huge sum of money that is a significant % of your portfolio, I would be more conservative and invest it over time. There are no guarantees you won’t put in the last investment just before a crash but your odds are much improved. Finally, each time you make an investment use it to rebalance your portfolio, rather than buying the same amounts of each asset each time.

By: The Digerati Life

The Digerati Life — Wed, 12 Mar 2008 15:07:08 +0000

Thanks for the info here. Technically, lump sum investing should get you better returns, but psychologically (or emotionally), DCA is a much more comfortable option for many investors, including myself. But I’m going to take a swing at LSI (lump sum investing) when I invest my business earnings into a SEP-IRA before April this year!

By: Mom

Mom — Fri, 07 Mar 2008 18:29:28 +0000

You could invest half in a lump sum now and dca the rest. Kind of a best of both worlds type of thing.

By: Anne

Anne — Fri, 07 Mar 2008 16:03:02 +0000

You should consider also looking into dollar value averaging, which seems to beat both DCA and lump-sum.

By: The Impecunious Investor

The Impecunious Investor — Fri, 07 Mar 2008 15:06:46 +0000

One thing to consider (and I am a very, very new investor myself so take this with a grain of salt) is that now, with the market falling, it seems like a good time to lump sum invest. Of course most people seem to think we haven’t hit bottom yet, but I would think that getting your money in now would be better than DCA over months when the market is bouncing back.