Long term Dollar Cost Averaging!
Are there any problems with long term DCA? Most people have seen these web pages that talk about lump sum VA short term DCA. They usally say it is best to invest lump sum, then they go on to say if you are investing periodically long term that's the best you can do. Their reasoning for this is the stock market moves in a random fashion with a positive bias. Now to me it seems that while the stock market does move randomly, it sometimes has a positive bias, and sometimes a negative bias. Corresponding to Bull markets and Bear markets. Normally Bull markets last longer and have more gain than Bear markets. While most people would say this is good, for the long term DCA investor what usually happens is, in the bear market the price will plunge below the average cost which causes the investor to panic and sell out at or near the market bottom.
Come see me at Systematic Investing group #board-966 lets talk formula plans.
