http://investing.curiouscatblog.net/2011/08/07/ken-fisher-disputes-some-investing-tips/ Tue, 23 Apr 2013 22:51:47 +0000 hourly 1 http://wordpress.org/?v=3.5.1 http://investing.curiouscatblog.net/2011/08/07/ken-fisher-disputes-some-investing-tips/comment-page-1/#comment-5741 Robert Wasilewski Tue, 09 Aug 2011 10:58:28 +0000 http://investing.curiouscatblog.net/?p=1295#comment-5741 He’s right of course on DCA. It does, however, assume that investor’s objective is to get the highest average return. If instead, for example, people seek to get the best return in all kinds of markets then DCA is best I think. For example if 3 of the 5 year periods are up and 2 are down then under assumption 1 do lump sum. You’ll be up 3 out of 5. But if you DCA you might be higher in all 5 scenarios but less higher in up markets.
Given the risk averse nature of investors I think minimizing the possibility of a loss over a number of periods might be the appropriate assumption.
When I explain DCA to people I give them a hypothetical example where the market is unchanged over 5 years and show them that DCA would have got them a positive return. They seem to like that.

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