mathjak107
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 27, 2005
- Messages
- 6,205
this study has been appearing around pertaining to the slight difference in performance between lump sum vs dca.
while dca is the laggard more often than not i can't help but think the results are skewed here in the bottom line difference.
i am not smart enough to due the calculations but the more i think about it the more i believe the 10 year time frames used skew things un-realistically.
in order for dca to be better the time frame has to end up at about where the time frame started .
the odds of a time frame doing that over 10 years is pretty common.
but when you are contributing to a plan most folks are doing it for far longer even approaching 30-40 years. no way are you even close to where the time frames started.
dca has to lag big time, not only because of the amount of money invested early on which is compounding for far longer but the gains over time have been huge with no chance so far of even being close to where you started the time frame..
i can't find any study that actually looked at rolling 30 year periods but it seems to me logically the outcomes will be far far different than the one posted.
http://business.time.com/2012/11/15/is-dollar-cost-averaging-dumb/
while dca is the laggard more often than not i can't help but think the results are skewed here in the bottom line difference.
i am not smart enough to due the calculations but the more i think about it the more i believe the 10 year time frames used skew things un-realistically.
in order for dca to be better the time frame has to end up at about where the time frame started .
the odds of a time frame doing that over 10 years is pretty common.
but when you are contributing to a plan most folks are doing it for far longer even approaching 30-40 years. no way are you even close to where the time frames started.
dca has to lag big time, not only because of the amount of money invested early on which is compounding for far longer but the gains over time have been huge with no chance so far of even being close to where you started the time frame..
i can't find any study that actually looked at rolling 30 year periods but it seems to me logically the outcomes will be far far different than the one posted.
http://business.time.com/2012/11/15/is-dollar-cost-averaging-dumb/
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