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Investing A Lump Sum Of Money In Stocks Pays Off

Friday, November 2, 2012 - 7:25 PM
Slow And Steady Dollar-Cost Averaging Doesn’t Always Win The Race

NEW YORK (MarketWatch) — A mutual fund giant challenges an investment technique financial advisers have used for decades, and many professionals are taken aback.

Investing a lump sum of money in stocks pays off - Weekend Investor - MarketWatch
4
ShorebreakShorebreak2,622 posts since
Apr 6, 2010
Rep Points: 14,212
1. Sunday, November 4, 2012 - 7:15 AM
The study is based on a total disregard of behavioral economics. Folks who "lump-sum-in" just before a market swoon are more likely to bail at or near the bottom. Folks who DCA into a falling market, on the other hand, think they're buying shares "on the cheap", and are much more likely to "buy-and-hold" and "stay-the-course".

I suspect there is an interesting back-story here.
2
BozoBozo137 posts since
Feb 14, 2011
Rep Points: 937
2. Sunday, November 4, 2012 - 2:00 PM
Yes, it is the human mind and the behavior that govern the investment strategy.  Don't listen to such talks that DCA is excellent or DCA is bad, one needs to test all strategies over time (that fits with one's particular style and associated behavior) and decide which strategy fits one optimally.  People are just boring, they have to come out with some revolutionary findings to make moeny and fame; just ignore all the recommended strategies in the news (once it is in the news, it is no longer a unique strategy for your profit), and this is indeed the strategy:D
2
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,426
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