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Dollar Cost Averaging - Anyone still buying?
Old 02-12-2009, 08:54 PM   #1
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Dollar Cost Averaging - Anyone still buying?

Wonder if anybody still buying mutual funds using DCA?


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Old 02-12-2009, 09:16 PM   #2
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1) If you are asking do I have a lump sum of cash that I am slowly investing into the market - no.

2) If you are asking am I investing my paycheck every two weeks into the market the answer is yes. New dollars going into whatever assets have been knocked furthest from my AA plan.

The first is DCA, the second is periodic investing.


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Old 02-12-2009, 09:42 PM   #3
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Yes, still buying here. Both regular contributions and lump sums get invested in the market as soon as they hit our accounts. We received a very nice bonus in early January and it has already been put to work. I expect other large sums of money coming in at the end of this month and in early April and they will get invested too. Looking at my investment accounts, right now I have a miserly $511.41 in cash and cash equivalents.
42 y/o, married, retirement portfolio = 43 x annual expenses
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Old 02-12-2009, 11:37 PM   #4
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No way man, I only buy when the market is flying high, that way I can pay top dollar for my funds...

This market is like, page 2 of the manual on why you DCA, you sound like it's evidence proving it wrong. In the book "The 4 Pillars of Investing" it outlines a graph that for a young dreamer DCAing into the market, this is the best thing that can happen to him or her.

I'm putting 2k into the market every month, wish I could do more.
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Old 02-13-2009, 03:25 AM   #5
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I don't get my match for the 2 week pay period if I don't DCA at least to the match (5%).

But I have come to believe the market should be timed if a bubble occurs. I reverse DCA-ed in 2007 out of equities into bonds/cash ending up with a 25% allocation left in equities. The DCA amounts were big chunks though. Now I am putting new money into equities to balance, to the extent possible, the 25% left in equities that was bought by DCA-ing at inflated prices.

DCA by payroll deduction is a joke when the market has two bubbles that burst when you are contributing in your 50's and 60's unless you grab and lock in profits or reduce losses by timing the bubbles.

But I do wonder if I were not working and contributing new money I would have the intestinal fortitude it would take to DCA or dump the "profits" I "saved" back into equities now that prices are low.

I don't think daily market timing is smart but I do think making moves at the right time is smart. It seems to me that DCA was meant to iron out volatility in price when that volatility was distributed around good prices. I think it cannot work when a macro structure like a bubble overlays normal market fluctuations if a time horizon is not very, very long.
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Old 02-13-2009, 03:39 AM   #6
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I almost wish I was working so I could DCA into this market. But I am pretty much all in with equities (ok 15-20% bonds and cash)
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Old 02-13-2009, 04:31 AM   #7
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Originally Posted by Disappointed View Post
Wonder if anybody still buying mutual funds using DCA?
Every week for me, every other week for her. Maxing both Roth funds too.
Everything's cheap now, can't resist.
Wouldn't it be great if you could find all the valleys and just invest there?
Best wishes.
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Old 02-13-2009, 06:50 AM   #8
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DW is still working part time and is still dumping the max into index funds. Probably one more year to go.
Every man is, or hopes to be, an Idler. -- Samuel Johnson
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Old 02-13-2009, 06:53 AM   #9
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Yeah, today is my pay day (usually on the 15th but that's on a Sunday), so another chunk of cash (14% of salary plus 5% in company match plus $416.66 into a Roth) is dutifully chasing the falling knife... usually these are the few days the market spikes up 300 points, only to tank again the day after I buy. Maybe I ought to keep it in cash for 3-4 days before investing it, hmm....
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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Old 02-13-2009, 07:15 AM   #10
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Still DCA at $700/month rate into VWAHX. I am almost at a pre-set target to have enough TE dividends to cover my annual school/property taxes. Plan is to have VWAHX serve as an independent income generator for those taxes.
Once that goal is achieved (by June 09 maybe), I will redirect that DCA money to stock funds I already own, most likely VEURX or VTSMX.
Can't contribute to my Roth anymore - no earned income, unmarried.
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
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Old 02-13-2009, 07:40 AM   #11
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Yeah - still maxing out my 401k, 403b, and 457 which are in stock index funds and some stable value funds. Odd feeling to max out and have the balance drop month to month.
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

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Old 02-13-2009, 09:48 AM   #12
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I suspended DCA'ing into VTSAX (Total stock mkt), VWIAX (Wellesley), and VfWIX (int'l) in my taxable account after rebalancing last October. I was getting close to my desired AA in September, so it was about time to stop anyway but with October's crash, my rebalance was over 7%. Right now my AA is still fairly close to my desired AA - - 42:58 instead of 45:55 is probably close enough for me though I have been musing and considering lately.

As for my TSP (401K), I still contribute $960 every two week pay period to it, which should result in contributing the max plus over-50 catchup to it by the time I retire. I moved most of my TSP balance and all of my TSP contributions from equity funds to "G-Fund" (government treasuries) back in December, 2007 since I was so close to retirement. I suppose I should say it was because of my astute financial prognostication, but it was mostly dumb luck coupled with revising my financial plan for ER.

I still haven't made my 2009 Roth IRA contribution but when I do, it will be in equities.
"You can never cross the ocean until you have the courage to lose sight of the shore." - - - C. Columbus
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Old 02-13-2009, 10:36 AM   #13
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Iíve been skittish about putting money into equities for 37 years; it always feels like jumping into hot acid. For a long time I had a rule to get lump sums in within a month or three. Now, Iím pushing myself to re-balance; the new rule is to move 1% of PF from Ginnie Maeís every other month or so depending on what the market and economy are doing.
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Old 02-13-2009, 10:37 AM   #14
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I think we are at the bottom of the market, DW asked if she should lower her 401K contribution. As the wife of an FA, I guess she just called the heard it here first!
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)

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Old 02-13-2009, 10:52 AM   #15
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We are still making our monthly contributions to our Vanguard mutual funds. They were on auto pilot before the crash and we have not changed them. However, we are not making large additional lump sum contributions in an attempt to rebalance our portfolio.

I be a girl, he's a boy. Think I maybe FIRED since July 08. Mid 40s, no kidlets. Actually am totally clueless as to what is going on with DH.
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Old 02-13-2009, 11:11 AM   #16
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Still making regular after tax investments, maxing 401k's and IRA's. I'm still in my 20's, so I regard this as a huge buying opportunity, and I hope the markets stay in the dumper for another 5-6 years and that DW and I remain employed. Well, I hope that I remain employed. DW remaining employed is almost cash-neutral all things considered.
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Old 02-13-2009, 01:26 PM   #17
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Still buying into my 401K, but had to reduce % due to other unexpected expenses. So, yeah, still DCAing.
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Old 02-13-2009, 01:39 PM   #18
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DW and I are still maxing out our 401k contributions, and have an additional monthly contribution to our taxable Vanguard account. Like FUEGO, I'm looking at this as a buying opportunity that could pave the way to ER for both of us in 12-15 years (I'm 36, DW is 40).
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Old 02-13-2009, 01:46 PM   #19
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I had a lump sum that I was investing in my Vanguard index funds over a period of time. Right up until last month. Now that the lump sum has been invested, I'll be contributing on a monthly basis instead.
I'm free and I like it!
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Old 02-13-2009, 02:12 PM   #20
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Originally Posted by Disappointed View Post
Wonder if anybody still buying mutual funds using DCA?

Yep. Every month. Stock funds, bond funds. We might start buying into a TIPS ETF.

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