07-21-2021, 11:16 PM
Unpopular advice - but the empirical data shows that counter intuitively lump sum bu
<!-- SC_OFF --><div class="md"><p>I think DCA is an excellent strategy, and it's what I do because of the nature of my financial situation, but for those who are investing in crypto from their pre-existing savings and who have an assigned budget they are planning to invest, the empirical data says that lump sum buy strategies almost always beats DCA.</p> <p>This article does a good job of summarising both the theory and practical aspects of why lump-sum investment mathematically beats DCA over the long term (and most of us here appear to be long-term investors)</p> <p><a href="https://www.dimensional.com/us-en/insights/taking-stock-of-lump-sum-investing-vs-dollar-cost-averaging">https://www.dimensional.com/us-en/insights/taking-stock-of-lump-sum-investing-vs-dollar-cost-averaging</a></p> <p>Also on the subject of data, this is a really unpopular opinion, but there is a huge amount of empirical data to show that TA rarely if ever works, and buy and hold beats day trading for almost all investors.</p> <p>*For those arguing about this, try and find a period in crypto over more than 3 years where DCA'ing a fixed sum over the long term beats cash injecting it immediately. The longer the time period you take to inject the money, the less you make in almost all cases.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/chance_waters"> /u/chance_waters </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/oogg9h/unpopular_advice_but_the_empirical_data_shows/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/oogg9h/unpopular_advice_but_the_empirical_data_shows/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>I think DCA is an excellent strategy, and it's what I do because of the nature of my financial situation, but for those who are investing in crypto from their pre-existing savings and who have an assigned budget they are planning to invest, the empirical data says that lump sum buy strategies almost always beats DCA.</p> <p>This article does a good job of summarising both the theory and practical aspects of why lump-sum investment mathematically beats DCA over the long term (and most of us here appear to be long-term investors)</p> <p><a href="https://www.dimensional.com/us-en/insights/taking-stock-of-lump-sum-investing-vs-dollar-cost-averaging">https://www.dimensional.com/us-en/insights/taking-stock-of-lump-sum-investing-vs-dollar-cost-averaging</a></p> <p>Also on the subject of data, this is a really unpopular opinion, but there is a huge amount of empirical data to show that TA rarely if ever works, and buy and hold beats day trading for almost all investors.</p> <p>*For those arguing about this, try and find a period in crypto over more than 3 years where DCA'ing a fixed sum over the long term beats cash injecting it immediately. The longer the time period you take to inject the money, the less you make in almost all cases.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/chance_waters"> /u/chance_waters </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/oogg9h/unpopular_advice_but_the_empirical_data_shows/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/oogg9h/unpopular_advice_but_the_empirical_data_shows/">[comments]</a></span>Kind Regards R