Author Topic: Walter Updegrave disses dollar-cost averaging strategy  (Read 553 times)

MoMan

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Walter Updegrave disses dollar-cost averaging strategy
« on: February 24, 2017, 10:24:55 AM »
I really like this guy. He used to be the writer for CNNMoney's "Ask the Expert."

Anyway, I was surprised, and intrigued, by the Vanguard study he discusses in his most recent column:
http://realdealretirement.com/why-dollar-cost-averaging-is-a-lousy-retirement-investing-strategy/#more-13695

He lays out some really good reasoning for investing a lump sum all at once instead of portioning it out over time. Unfortunately, I don't have a lump sum to invest, so I will continue to drip (er, I mean pour) my money monthly into my 401(k) and other taxable accounts.
"He is richest who is contented, for content is the wealth of nature."

neverrun

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Re: Walter Updegrave disses dollar-cost averaging strategy
« Reply #1 on: February 25, 2017, 10:18:32 AM »
We must have read a different article.  The one linked specifically discusses a investing a one time lump sum, if one should just invest it right away or dollar cost averaging that same lump sum.  It's not a diss on dollar cost averaging in general.

scottish

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Re: Walter Updegrave disses dollar-cost averaging strategy
« Reply #2 on: February 26, 2017, 09:01:31 AM »
Good article.   It would be nice to see the variance on the results - that is the distribution as to how much better/worse the two approaches performed each year.

That would give us an idea if dollar cost averaging is improving diversification (in terms of not investing all at once) at a cost of lower returns, or if the lump sum investment is a winner in all ways.