[chinaco]

Quote:

Originally Posted by haha That is what he meant, he spells it right out. Don't buy at the wrong place or the wrong time. Buy a cheap index fund and slowly DCA into. The economy will do fine over time. Make sure you don’t buy at the wrong price or the wrong time. That’s what most people should do, buy a cheap index fund and slowly dollar cost average into it. If you try to be just a little bit smart, spending an hour a week investing, you’re liable to be really dumb. I cannot understand the negative take on diversification-over- time from some posters here. Why would diversification over asset classes and securities be important, but not diversification over time? ..... Ha

I DCA when i move money most times even when I could lump sum invest. I do not trust my ability to read the economy. My experience has been that I get it wrong more than right when it comes to trying to time it.

While the quote from Buffet did not state it, I suspect he is getting at the negative affect of dumping money into hot investments (sectors or companies). By the time the average investor recognizes the investment is hot, it often has already peaked or most of the run is over. DCA mitigates the risk.