Dollar Cost Averaging Is The Best Investing Strategy Ever Created (Here's Why)

[@hrhsophiathefirst4060]

I am excited to say I agree with you. I started investing in index funds in August 1999 by way of my 401K contribution of $500 monthly. Eventually I was able to max over the years and then started a Roth IRA and then an HSA. Then a backdoor Roth IRA and now a Roth 401K and a brokerage account. Over the years the only reason I knew what was going on in the market is when it is so big that it takes over the news! Other than raising my amount to match the maximums and gleefully counting down to my 50th birthday in 4 years, I am hands off. I am happy to report it has done marvelously, it goes down and it goes up and I keep plugging away. I call it my get rich slowly method and it has served me well!

[@NextLevelLife]

The get rich slowly method is a great way to describe it (even if it does sometimes happen quicker than we might expect when we first get started)! I'm glad to hear that the approach has worked out so well for you over the years. Like you said the key is to just keep plugging away whether the markets are up or down :)

[@kerrylow6894]

I agree. I'm in to get rich slowly too. Overpaying mortgage and gbp cost averaging!

[@smallmj2886]

I've been investing a fixed amount every week for a while now. I buy quality funds every Friday, regardless of whether things are up or down. My portfolio may be down right now, but I'm still seeing my monthly dividends grow and I have a long enough time horizon that I'm not worried about it. Start with quality, stay the course, and let the market sort itself out.

[@NextLevelLife]

Thanks for sharing and great job sticking with it even when the markets are down!

[@andreharrison4158]

Just checking if you're still down.

[@smallmj2886]

@@andreharrison4158 I'm currently up a tiny bit. I'm a bit overweight in Canadian Financials, which are still being dragged down by American banking fear.

[@OnCashFlow]

It's really crazy how simple really is often much better in personal finance/investing.

[@NextLevelLife]

It really is surprising sometimes. I couldn't agree more :)

[@scott1441]

Best investment strategy - auto investing- in time you learn to will live without those funds - invest and forget . I did this for my son at 25 years old . He will retire very well

[@NextLevelLife]

That's an awesome thing you've done for you son!

[@michaelswami]

Great work. Thank you. DCA is not only a great investment approach, it also comports with most investors cash flow. Get paid, invest, repeat.

[@NextLevelLife]

Well said!

[@JoseRafaelFiguera]

"and it takes a lot of Cojones" lol, great note, great video

[@johnewing2159]

fantastic video as always mate 👍 quality stuff, thank you!

[@NextLevelLife]

Glad you enjoyed it :)

[@rickmiles5297]

I agree. Dca is the best for us non options trading folk.

[@whispie.]

Great video. Tip on Spanish: Cajones = Drawers (as in 'the drawers of my kitchen are big') vs Cojones = Balls (which is probably what you meant) 😁

[@NextLevelLife]

Duly noted, thanks for the tip!

[@dariusdareme]

I watched the whole video. Where Lambo?

[@Commando303X]

Mathematically, you are incorrect: Behavioral hurdles notwithstanding, usually (read, not always), lump-sum investing a sum of cash up front yields greater returns than dollar-cost averaging the amount periodically across a protracted period (e.g., monthly over one year).

[@Alphahydro]

I DCA, but I determine if current market conditions are optimal before deploying funds by doing something as simple as checking the VIX and RSI for each of my holdings. Anything less isn't wise.

[@polarbsdlkfj]

In the DCA scenario with an S&P 500 index fund specifically, the dividends make up the bulk of your returns except in the greatest of bull runs. Logically, it appears to me (and many others) that dividend growth rate is the fulcrum for compounding returns in the stock market. Therefore, it is not in your best interest to invest in index funds that dilute your returns with unsustainable growth companies that provide no return to the shareholder. A fund like SCHD or FDVV would be the superior choice to implement the DCA strategy.

[@mr.moneybag8568]

Good video buddy

[@NextLevelLife]

Thanks 👍

[@rockystaatz521]

I tend not to use it in up times because it’s like you aren’t sure of what you are doing in down times if you did your homework you have a true opportunity to grow

[@richfinance]

What about lump-sum investing? With the bear market we have now, lump-sum investing should be a better strategy, or what do you think? Great video btw!

[@NextLevelLife]

Purely from a "growing a nest egg" point of view, historically, it is usually best to get the money invested as soon as possible. Therefore, more often than not, lump sum investing (assuming you have a lump sum sitting around) is usually the better way to go than spacing out the investment contributions over months or years (assuming you are investing broadly in the markets via something like simple index funds, this typically holds true in both bear and bull markets, largely because the markets tend to rise more frequently than they fall). However, a lot of people don't have a pile of cash just sitting around waiting to invest. The only piles they do get on a regular basis are from their salaries and/or regular business income. In those instances, investing whatever's left over in a lump sum or investing the income consistently via DCA is, basically, one and the same thing :) I hope this clears things up!

[@JuancoPRoFlow]

If you know where the exact bottom is then yea lump sum is where it's at.

[@dogelife7901]

@@JuancoPRoFlow its super easy to know the bottom...

[@Doni5717846]

@@dogelife7901 Warren Buffet doesn't even know when bottom hits by his own admission.

[@dinalsamarasinghe3758]

@@dogelife7901 lol no

[@thomasvogelsinger4007]

I agree but it is much better to invest in single companies carefully chosen instead of indices

[@dogelife7901]

Good luck with that

[@josemv25]

You sure about that?

[@JohnHandle-]

I'm here, am I rich yet? E_E