Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Does Frequency Matter?
Old 10-29-2004, 07:59 PM   #1
Recycles dryer sheets
 
Join Date: Jul 2004
Posts: 170
Does Frequency Matter?

I'm currently investing a fixed amount 2 times per month.

Would I benefit more from DCA if I spread the amount over 4 weeks....daily?

Thanks,
TD
Tommy_Dolitte is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Does Frequency Matter?
Old 10-29-2004, 08:44 PM   #2
Recycles dryer sheets
 
Join Date: Jan 2004
Posts: 159
Re: Does Frequency Matter?

No and no.

malakito
malakito is offline   Reply With Quote
Re: Does Frequency Matter?
Old 10-30-2004, 11:23 AM   #3
Dryer sheet aficionado
 
Join Date: Mar 2004
Posts: 39
Re: Does Frequency Matter?

Quote:
I'm currently investing a fixed amount 2 times per month.

Would I benefit more from DCA if I spread the amount over 4 weeks....daily?
I believe that you would benefit from a higher frequency when the market is trending up, and benefit from a lower frequency when the market is going down. But, DCA assumes that the market isn't logical, and goes up *and* down, randomly. So unless you can predict the way the market is going to go, frequency shouldn't be very important.

Typically, people DCA monthy, as it's easy that way. Yearly would be too infrequent (in my opinion). Twice a month is fine; daily would be overkill (especially if there are any fees involved in the investing; even stamps would start to add up with daily investing, if mailing money).
-Scott
IDunno is offline   Reply With Quote
Re: Does Frequency Matter?
Old 10-30-2004, 11:44 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
Re: Does Frequency Matter?

The ideal strategy:

Dont DCA when the market is going up, put it all in at once.

DCA as infrequently as possible and in as small an amount as possible while the market is going down, then when it hits bottom, DCA all of your remaining money in that day.

Only one problem with this strategy...

Lets look at a slightly modified version without that nasty future predicting problem...

If you believe the market is undervalued, dca in larger amounts more frequently. If you believe the market is overvalued, dca in smaller amounts less frequently.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Does Frequency Matter?
Old 10-30-2004, 12:49 PM   #5
 
Posts: n/a
Re: Does Frequency Matter?

Re. "Does Frequency Matter?". I really wouldn't know,
but it seems important to my wife

John Galt
  Reply With Quote
Re: Does Frequency Matter?
Old 10-30-2004, 02:11 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
Re: Does Frequency Matter?

Less frequently I presume?
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Does Frequency Matter?
Old 10-30-2004, 02:29 PM   #7
 
Posts: n/a
Re: Does Frequency Matter?

Quote:
Less frequently I presume?
LOL
  Reply With Quote
Re: Does Frequency Matter?
Old 10-30-2004, 02:38 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
Re: Does Frequency Matter?

I'm fairly certain there were no old women involved with inventing viagra.

"Fer chrissakes, i'm 70 years old, put that damn thing away and lets go watch tv!"



By the way, our ability to hijack and devolve a thread astounds me.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Does Frequency Matter?
Old 10-30-2004, 03:30 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
Re: Does Frequency Matter?

Mae West Truth or legend? And then there are various forms of 'value averaging' - but I'm not sure where that fits in a hijacked thread.
unclemick is offline   Reply With Quote
Re: Does Frequency Matter?
Old 10-30-2004, 08:47 PM   #10
Thinks s/he gets paid by the post
retire@40's Avatar
 
Join Date: Feb 2004
Posts: 2,670
Re: Does Frequency Matter?

Quote:
Re. "Does Frequency Matter?". * I really wouldn't know,
but it seems important to my wife

John Galt
How come you wouldn't know? Aren't you there?
I'll tell ya, you get no respect.
__________________
No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
retire@40 is offline   Reply With Quote
Re: Does Frequency Matter?
Old 10-30-2004, 09:16 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
Re: Does Frequency Matter?

You'd think he would, since his wife likes to talk to him during the act.

At least if theres a phone nearby...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Does Frequency Matter?
Old 10-30-2004, 09:52 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Feb 2003
Location: Mesa
Posts: 3,588
Re: Does Frequency Matter?

You need to answer a number of questions before you can address your question adequately. . . What is the source of the money and what are you DCAing into? If the source of the money is your paycheck, then what would you do with the money until you invest it?

If you are investing a regular amount from your paycheck into equities, then historical returns are best if you invest at a rapid rate -- as rapid as your paychecks. Of course historical returns may not predict future results.

If you are moving money from a bank account to equities, then historical returns are best if you move the money as a lump sum . . . and don't DCA. Of course you also increase the downside risk by doing this.
sgeeeee is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Need Help with Delicate Matter............ FinanceDude Other topics 23 01-18-2007 09:38 PM
Why does mutual fund fees matter? Van FIRE and Money 36 05-15-2006 07:24 AM
Does Per Cent Of Tax Matter? yakers FIRE and Money 10 01-06-2006 07:12 PM
Do Mutual Fund Fee's Matter? km4hr FIRE and Money 6 11-29-2005 12:44 PM
Does it matter *it's Halloween? notTwain Young Dreamers 3 10-31-2004 03:29 PM

» Quick Links

 
All times are GMT -6. The time now is 03:41 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.