Dollar cost average strategy

Sup slut!

To properly DCA it should be a fixed money amount on a fixed schedule. ANYthing that involves market moving becomes market timing and IMO dissipates the whole point of DCA

1st of the month, every month. I've got a day job, so very limited time to watch the pendulum swing.

In 25 years I'll be more dialed in to what's going on, but right now this is simply the long game.

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For you all that inject money regularly, do you have a strategy/trigger?

Time - every week, two weeks, etc
Market moves - every time marker dips x percent


Just wondering strategies people use when have an influx of cash, but don’t wanna go all in at once to mitigate risk.

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Here is my view ~annually:
- My 401K: Contributions happen throughout the entire year
- Wife's 401K: Same
- IRA Contributions: Fully fund in January, convert to Roth, then invest immediately
- HSA: Contributions throughout the year are invested, never spend HSA monies

-Taxable Account: I think this is what you are most interested in. I have this automated through Schwab Automatic Investing. 5th and 20th of every month I have rules created for which index funds to buy and how much to buy of each. I have a cash reserve sitting in that taxable account that is excess the amount of each bi-monthly withdrawl. I also have it so that excess free cash flow from checkings automatically rolls into the taxable account via a separate 'rule' on the ~3rd and ~18th of every month. This makes it so my checking account stays relatively stable throughout the year and funds the automatic investing without me doing anything.

This system allows me to "DCA" the entire year without me ever needing to do anything manually (other than the IRA). I set it up ~6 months ago and it seems to be working well from a process standpoint. In total, I think this system has resulted in buying almost every week of the year at some level.

quote:

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Here is my view ~annually:
- My 401K: Contributions happen throughout the entire year
- Wife's 401K: Same
- IRA Contributions: Fully fund in January, convert to Roth, then invest immediately
- HSA: Contributions throughout the year are invested, never spend HSA monies

-Taxable Account: automated Investing. index funds. excess free cash flow from checkings automatically rolls into the taxable account via a separate 'rule'

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This is the way - exactly what I do as well

DCA props up the market, imo.

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but don’t wanna go all in at once to mitigate risk.

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The entire market is risk. Mitigation should involve safe money not in the market. Some like bonds, cash, insurance, etc. What i do is this:
If you have large sums that you want to invest, wait for a drop in price for what you're looking at investing, then purchase.

Everyone has their own philosophy

I already DCA through my 401K so I don't feel the need to take that strategy outside of that

I make weekly contributions to brokerage and crypto accounts that sit as cash for some time before I decide to take positions. With my crypto portion I definitely wait for dips. It's too volatile to just blindly DCA in without getting ripped off.

Depends on the amount of money my client is putting in. A DCA strategy on $500,000 may look very different than $25,000.

As others have said, though, you want a fixed time and dollar amount scheduled out. If you pay attention, you have the freedom to accelerate a payment if the market drops a certain % - though I would suggest making that % larger than just 1%. Never delay a transfer in, but you can always accelerate.

Bottom line - it's all psychological unless it's an enormous amount of money. If someone invests $25k over five months or if they invest it all at once, they will not look back 7 years from now and regret either move. It does help psychologically in the short-term though.

I get paid bi-weekly so every check money goes into my retirement account, a 457b. I have friends who "know the market well" who have some taxable accounts and also Roth IRAs who time the market and I have shown them over and over how I demolish them in returns yet they never learn. I'm not savvy or anything, just low cost index funds, 1 international index, 1 total market US index, a big dividend fund, and a mid cap fund. Very generic and boring but works.

ETA: I'm not shoving papers in their face trying to prove it wrong. They are the ones who discuss it all the time, not me. We get our phones out and look at last 1,3,5, and 10 year and it's never even close with any of them

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I already DCA through my 401K so I don't feel the need to take that strategy outside of that. I make weekly contributions to brokerage and crypto accounts that sit as cash for some time before I decide to take positions.

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This is what I do. Aside from my 401K and IRA (back door to Roth), I have cash sitting in my taxable brokerage account that I fund biweekly. I also follow the market pretty regularly and I'll use that cash to jump on individual opportunities when I see them, which is typically on a weekly or biweekly basis.