Dca how long for?

[livingalmostlarge]

I usually lump sum into the market because I don't sell ever. I also am pretty lazy and I'm going with vti 75% and vxus 25%. This is the basis of my Portfolio for the most part. I'm mostly bogelhead. Yeah I could be more hands on or pay someone but I don't like too.

But for the first time I'm considering dca. If I did it weekly for a month or two is that dca? How long to consider it dca? Yes the market is high now but this is not money I plan on spending.

For the first time I'm nervous not just dumping it right in

 

[Al18]

DCA every few months for 2 years

 

[MarieIG]

The time, and frequency, of DCA can vary.

I also DCA with my Roth conversions, as I had been having difficulties finding the perfect time to convert.

 

[Lewis Clark]

It's impossible to know in advance which strategy will be best in any given particular situation. Overall, though, investing the lump sum provides a better return than dollar cost averaging.

How to invest a windfall: Lump Sum or Dollar Cost Averaging? - Early Retirement Now

This issue is as old as personal finance itself: What should an investor do with a large windfall, say, a bonus, gift, inheritance, etc.? Invest it all at once as one big lump sum or should we “ease into the market” and invest the cash in multiple installments? The latter is called Dollar Cost...

earlyretirementnow.com

 

[COcheesehead]

Lump sum usually beats DCA because markets go up more than they go down.

 

[TheWizard]

It would be good to understand the OP's situation.
Does he have excess income to invest every two weeks? Or did he/she come into an inheritance of $100,000 and is wondering how to invest it?

Myself, I DCAd into investments during forty years of employment, a rather standard situation.
Now in year 14 of retirement, I often have extra income after all bills are paid which I move into my taxable account settlement fund.
I then use limit orders to buy equity ETFs which might or might not execute quickly, depending on market moves. So I'm still DCAing into investments even now ...

 

[FREE866]

The less decisions I have to make is best for me mentally and financially. For that reason, I always did lump sum.

 

[disneysteve]

DCA is a method to use that accounts for investable funds you don't yet have. For example, putting $500 per paycheck into a mutual fund. You can't do a big lump sum because you don't have a lump sum available. You invest as you get it.

If you have a lump sum and this is a long term investment, it's best to put it in all at once. Yes, the short term result might not be as good if there's a drop soon after but long term it will win out.

 

[Al18]

I don’t understand why you’re not already invested in the market

 

[Koolau]

Over the years when I was w*rking, I DCA'd because money went into my "forced" savings (401(k)) and a separate tIRA. Now, I'm only 'taking' from my investments. Is there such a thing as DCA'ing OUT of one's investments (reverse DCA)?

 

[disneysteve]

Over the years when I was w*rking, I DCA'd because money went into my "forced" savings (401(k)) and a separate tIRA. Now, I'm only 'taking' from my investments. Is there such a thing as DCA'ing OUT of one's investments (reverse DCA)?

Sure. You could take a lump sum withdrawal in January to cover your anticipated annual spending or you could draw money out monthly as you go.

 

[Koolau]

Sure. You could take a lump sum withdrawal in January to cover your anticipated annual spending or you could draw money out monthly as you go.

So far, I've been taking it as I need it with no set schedule. Good point about taking (for instance) monthly. I wonder if there is an advantage other than the "set and forget" concept of regular withdrawals.

 

[disneysteve]

So far, I've been taking it as I need it with no set schedule. Good point about taking (for instance) monthly. I wonder if there is an advantage other than the "set and forget" concept of regular withdrawals.

I’m 2 years in and have done the same thing, taking it as needed. No scheduled withdrawals. I don’t feel the psychological need to recreate a paycheck, not that there’s anything wrong with doing it that way.

 

[SnowballCamper]

Invest as soon as you have the dollars to do so. If it's extra money from each paycheck then it's dollar cost averaging. If it's a windfall, then it's a lump sum. The goal is more time in the market.

 

[Al18]

The Schiller PE ratio is 41.77. The median is 16.10. What could possibly go wrong? Shiller PE Ratio - Multpl

 

[RunningBum]

Why don't you invest it however you want to, without worrying about whether it meets an arbitrary definition of "DCA"?

 

[GoBirds]

Half now

1/x over x months, where 3<=x<=6