REWahoo
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Even God Couldn’t Beat Dollar-Cost Averaging is a number crunching, chart heavy blog post by Nick Maggiulli on his "Of Dollars and Data" blog site. It is a detailed look at the historical success of DCA vs Buy the Dip investing.
Spoiler alert: Even if you know when the low is reached and that's when you buy, DCA still "wins".
One of his closing lines:
This is the last article you will ever need to read on market timing. It’s a bold claim, but I’m not messing around.
Imagine you are dropped somewhere in history between 1920 and 1979 and you have to invest in the U.S. stock market for the next 40 years. You have 2 investment strategies to choose from.
Dollar-cost averaging (DCA): You invest $100 (inflation-adjusted) every month for all 40 years.
Buy the Dip: You save $100 (inflation-adjusted) each month and only buy when the market is in a dip. A “dip” is defined as anytime when the market is not at an all-time high. But, I am going to make this second strategy even better. Not only will you buy the dip, but I am going to make you omniscient (i.e. “God”) about when you buy. You will know exactly when the market is at the absolute bottom between any two all-time highs. This will ensure that when you do buy the dip, it is always at the lowest possible price.
Spoiler alert: Even if you know when the low is reached and that's when you buy, DCA still "wins".
One of his closing lines:
I hope it makes you re-consider having “cash on the sidelines” ever again.