Re: Simple Investing Advice?
Posted: Sun Aug 29, 2021 5:45 am
Personal Finance for Residents of Japan
https://retirejapan.com/forum/
Is this repetition every month what most people mean by "dollar cost averaging"?mighty58 wrote: ↑Mon Apr 05, 2021 2:57 pm Don't waste time trying to learn about investing. Stop trying to penetrate the seemingly impenetrable sites. Investing is dead easy, as Kanto stated above. All the advice you need is there. Figure out (once) how to push the "purchase" button for those products, and then repeat every month or whenever you can. Don't sell. Ignore everything else as noise. Do that, and voila, you will have outperformed 80% of active investors, professionals included.
Exactly. For example, let's suppose you have 600,000 yen to invest. You could invest the lump sum (600,000 yen), or you could divide that money by 12 months and invest 50,000 every month. That would be dollar cost averaging.anroy wrote: ↑Tue Nov 30, 2021 2:09 amIs this repetition every month what most people mean by "dollar cost averaging"?mighty58 wrote: ↑Mon Apr 05, 2021 2:57 pm Don't waste time trying to learn about investing. Stop trying to penetrate the seemingly impenetrable sites. Investing is dead easy, as Kanto stated above. All the advice you need is there. Figure out (once) how to push the "purchase" button for those products, and then repeat every month or whenever you can. Don't sell. Ignore everything else as noise. Do that, and voila, you will have outperformed 80% of active investors, professionals included.
(There are technical definitions but are difficult to understand for a non-finance guy like myself).
It is worth mentioning that lumpsum investing statistically outperforms DCA.pfdsa wrote: ↑Tue Nov 30, 2021 2:44 amExactly. For example, let's suppose you have 600,000 yen to invest. You could invest the lump sum (600,000 yen), or you could divide that money by 12 months and invest 50,000 every month. That would be dollar cost averaging.anroy wrote: ↑Tue Nov 30, 2021 2:09 amIs this repetition every month what most people mean by "dollar cost averaging"?mighty58 wrote: ↑Mon Apr 05, 2021 2:57 pm Don't waste time trying to learn about investing. Stop trying to penetrate the seemingly impenetrable sites. Investing is dead easy, as Kanto stated above. All the advice you need is there. Figure out (once) how to push the "purchase" button for those products, and then repeat every month or whenever you can. Don't sell. Ignore everything else as noise. Do that, and voila, you will have outperformed 80% of active investors, professionals included.
(There are technical definitions but are difficult to understand for a non-finance guy like myself).
It's more subtle than that. Lump sum beats DCA on average. But you might not be average. So you will *probably* be better off with the lump sum, but might not, and there's not much in it either way, and no way to tell in advance. Therefore, do what you're most comfortable doing.EmaxisSlim Cultist wrote: ↑Tue Nov 30, 2021 4:48 am It is worth mentioning that lumpsum investing statistically outperforms DCA.
If you get $100,000 from your dead great uncle you are better off investing the whole lot in one go.
I disagree, Vanguard has published quite a bit on this subject. Windfalls should be invested in a lump sum. That is what the data shows.adamu wrote: ↑Tue Nov 30, 2021 7:02 amIt's more subtle than that. Lump sum beats DCA on average. But you might not be average. So you will *probably* be better off with the lump sum, but might not, and there's not much in it either way, and no way to tell in advance. Therefore, do what you're most comfortable doing.EmaxisSlim Cultist wrote: ↑Tue Nov 30, 2021 4:48 am It is worth mentioning that lumpsum investing statistically outperforms DCA.
If you get $100,000 from your dead great uncle you are better off investing the whole lot in one go.
They say that it is "prudent" to invest as a lump sum, but they do not use your language that "you are better off" doing so. The odds are in your favour, but it's not guaranteed. They also emphasise that dollar cost averaging is worth considering if you are worried about a downturn.EmaxisSlim Cultist wrote: ↑Tue Nov 30, 2021 8:39 am I disagree, Vanguard has published quite a bit on this subject. Windfalls should be invested in a lump sum. That is what the data shows.
This is a dilemma many people face if they are lucky enough to inherit money.
https://investor.vanguard.com/investing ... t-lump-sum
