Quote:
Originally Posted by GGG
The statement isn’t that it will go up. It’s that the Dollar cost averaging will out perform market timing.
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The implicit assumption in DCA is that the trend is upwards over time. In North America that has been true since the beginning of stock markets. That doesn't make it an immutable law.
It's also quite difficult to statistically determine how good at market timing to make a backrest. If you made it perfect it would hugely outperform (but that's obviously unrealistic). On the other hand, market levels are at least partially psychology so technical indicators that market historians use as a proxy for market timing tend to be poor.
It's like the old "if you miss the best/worst ten days" commentary. It's nearly impossible to miss only one set because they generally take place at the same time during periods of high volatility (generally at lows).