Author Topic: The power of DCA and staying the course  (Read 713 times)

jinga nation

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The power of DCA and staying the course
« on: July 02, 2020, 06:24:21 PM »
V-shaped recovery in my Vanguard account (sum of all my accounts: JN's old IRA, Mrs. JN's old IRA, brokerage account).

One can read all they want about dollar cost averaging, staying the course, market recovery etc. There's no substitute for actually seeing the effects in one's account. Data is a powerful thing.

SP500 hasn't hit the highs of Feb 2020, yet investments have recovered. Effect of the power of dividend reinvestment and compounding returns and all that jazz Burton Malkiel talked about in A Random Walk down Wall Street and in all those Bogleheads' recommended reading lists.

I didn't make any extra buys in any of my Vanguard accounts. Thanks for reading, and hope you've all recovered or done better than me. (We did continue to max our current retirement accounts offered via employer.)

Maenad

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Re: The power of DCA and staying the course
« Reply #1 on: July 03, 2020, 08:40:03 AM »
I noticed the same thing with the Q4 2018 bear market. It's a powerful testament, and you're right - sometimes you have to live through it to really grok it.

(Not seeing quite the same thing this time since we retired in March, so we aren't putting in anymore. But we aren't down much, definitely not enough to invalidate the SWR.)

RainyDay

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Re: The power of DCA and staying the course
« Reply #2 on: July 06, 2020, 09:00:13 AM »
One can read all they want about dollar cost averaging, staying the course, market recovery etc. There's no substitute for actually seeing the effects in one's account. Data is a powerful thing.


You're absolutely right -- seeing it in effect, particularly in your own accounts -- drives home the point like nothing else.

I'm still in the accumulation phase, so I've just kept stuffing my regular contributions into my Vanguard accounts (plus some extra when I could), and I'm now just slightly over the total from when the markets hit highs around the 20th of February. 

I also have an acquaintance who moved everything to cash in the second week of March...at what point will he get back in??? 

jinga nation

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Re: The power of DCA and staying the course
« Reply #3 on: July 06, 2020, 10:08:41 AM »
I also have an acquaintance who moved everything to cash in the second week of March...at what point will he get back in???

so many times have I contemplated going all cash (easy, a few clicks) but not knowing when to dive back in with high six figures and/or not having the guts/cojones.

DCA is so much easier. Lazy investing for the win!