Thursday, May 1, 2008

Is Dollar Cost Average a Myth?

Is Dollar Cost Average a Myth?

This time I'm blogging to find out and not to tell all. When my agent or friends use to talk about DCA (Dollar Cost Average), it was pretty convincing, but something always seemed wrong.

So does curiosity kill the DCA concept. I was curious, so started surfing, and found that just as there are many sites, fund etc promoting DCA, there are many which don't agree with it.

Quote Timothy Middleton in his site
"Popular wisdom says scheduling your investments is the best way to make money. But it's actually a sales gimmick to wheedle over time what you won't commit up front."

You can read more in the above website or do more searches. But personally to me, by my experience, DCA comes in useful when you invested in a high market, and the market keeps on dropping, buying monthly would help you average out. But if you bought during a low market and market's going up, why would you want to average out when you already bought at a low price?

Buy low sell high?


Pak Maeh said...

Most important thing is to take action... DCA may not applicable in all area but in my oppinion it is applicable in long term investment for example 20 years or more..


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