Dollar cost averaging

Just buying as much as soon as you can works better during a bullrun.

nobody can time the bottom, DCA is just about reducing risk.

Sorry this probably sounds so dumb, but doesn’t putting more money in increase your risk?

yes its good unless you're investing in a scam like crypto

investopedia.com/terms/d/dollarcostaveraging.asp

Everything works during a bull run.

If you're confident the price will rise DCA is a good way to break even quicker if it does.

It can also be seen as degenerate gambling as you keep betting more as the price falls.

yes, but also increases your reward. most people dollar cost average stocks that go down because the overall market is down, not because the fundamentals of the company has changed.

Take yesterday for example, AAPL and T dropped relatively sharply due to the market. Nothing changed with the companies so I increase my position in bot.h to get a lower cost basis on my shares. If your position was negative, it will lower the amount the stock needs to increase to break even.

Looking at threads like this is hilarious, given how so many morons in here are also participating in crypto and stock markets with such a limited knowledge of what they're actually doing

Very clever response

>it's been a few months, why am I not a millionaire yet?

Would it be fair to say you’re “doubling down” on your initial investment decision?

Thats not what I mean nor my first round with Crypto. I should have waited for clear bull sign or wait until true capitulation. If I cant find the bottom wait for bull signal.

OP is a faggot and should read a book instead of asking utterly retarded questions only a Somali would be stupid enough to ask on an anonymous West Brazilian pottery enthusiast board

Also 4 posts by OP
King of faggots, here he is

The amount of fucking retarded new faggots here is insane. Welcome to the fucking show retards this has happened many times.

So wise

Only if you dont believe in the value of what you are investing in.

Why is biz so retarded. DCA is such a good strategy because you get more when it is cheap, thus the avg price gets lowered.

Assume you have 4 dollar. At one point a corn costs 2 dollar and you spend 2 dollar so you get 2 corn. At the next point corn costs 1 dollar, you spend again 2 dollars and get 2 additional corn.

In total you now how 3 corn while you spend 4 dollars, aka you paid 1,33 dollar on average NOT 1,5dollars, what brainlets here think would be the right value.

Cause you buy MORE when it is cheap, since you spend the same amount, it is not in the middle of both prices it is closes to the cheaper one.

For OP and all other utter retards ITT,
The reason for DCAing is so you can get into a market without needing to follow it or time the bottom which almost never works
Obviously this is not meant to be done right after a bubble burst, but during a bear market it can be pretty effective, giving you the average price of the bear market before it starts to go up

Im wondering why it matters whether an individual investor believes in the investment.

>a corn costs 2 dollar
>spend 2 dollar
>you get 2 corn

lol no

This.

If you're in the market for accumulating something you feel okay about that isn't likely to completely go belly up (think gold/silver/stable mutual funds, index funds), then you buy as you can. Sometimes you buy higher, sometimes lower, but it works a lot better than trying to figure out a "dip" to buy and going all in and then losing value.

This is pretty similar to what happens when you're investing $500/month in your 401(k). Over time, it's usually a good deal, but because the index funds generally have an upward trend the later buys aren't usually worth quite as much. Best deal would be finding the absolute bottom and going all in right then, and finding the absolute top and bailing out. Obviously, therein lies the problem because those things aren't obvious and lots of people (especially, but not only, cryptofags who don't really get basic financial concepts) make some pretty big miscalculations.

Dollar cost averaging gives an additional degree of stability to something that is inherently somewhat volatile. You won't win as big as if you had excellent predictive ability, but you won't lose as big when you finally realize your predictions were shit.

If you set your investment in an index fund to $100/month and just let it go, the upward trend is going to serve you well. You don't get out of the fund until you're at a satisfactory point of earnings to cash in, and you don't sell the shirt off your back to chase a run in hopes that you've gambled better than everyone else. This week, a share in the fund might be $100, it was $80 last week, it's $120 next week and only $40 the following. When shit's not great, you're just buying more. When shit's awesome, the value in your portfolio is too. At some point, you look at what you've collected and decide you have reached the point you want to cash out and don't look back at what "might" have been.

If you wonder that, you might be retarded.

You are unable to even read investopedia and understand the basic concept of DCA. I geniunely do not know why anybody with half a brain comes to this board anymore.

Good explanation thanks friend

Whoa! Absolutely mindblown!

mostly to laugh at people

Hmm, really makes you think.

depending on your mindset. you could just say your increasing your position in an investment because you think it will provide better returns in the future.

I try to dollar cost average each of my positions in a downward market, but I usually don't have sufficient cash at the time the markets are down so I choose the ones I either think are most undervalued or have the largest growth potential.

Which cryptos are you DCA’ing

What? Did I specifically point my insult at you? Asking questions alone is fine, everybody has to start somewhere.

If anything I am insulting the people that ask basic questions like yours AND invest money into crypto at the same time.

Now I hope you didn't put any money into crypto or stocks yet, is that right user?

>dollar cost averaging
It's a retarded coping mechanism for people that can't call the bottom but want to accumulate anyway.

Honestly I was sort of leaning that direction initially but I like to keep an open mind. A couple of posts here have given me a new perspective.

Almost no one can call the absolute bottom. DCA is just a form of risk mitigation. Say you have $5k and you thought the drop to 5k was the bottom. You go all in, and buy 1 BTC for 5k. If you were DCA, maybe you buy $1k of BTC of 5k.. then it drops to 4k, you buy another $1k at 4k, then it drops to 3k, you buy another $1k at 3k. You wouldn't have as much BTC as if you timed the absolute bottom at 3k, but you would have more than if you tried to time the bottom and failed.

Thanks for being a productive contributor user. We need more people like you on this board.

Wow 42 replies without a single image.

I bought stock at 2.5, far below book value. I ran out of money and my DCA is 2.27 a share. It's at $1.6 now but margin loans are going to get called in my country due to liquidity problems and bank capital requirements. If i had more money, i'd be buying. I'm in the process of getting dad to put a few hundred k in. Sometimes what you think is the bottom just really isn't.

it's just a way to talk to people with weak hands to make them avoid selling in a panic. non-retards can trade without emotional mind tricks.

>dollar cost averaging

that's just americans being dumb, nobody in europe or asia actually does that shit, they just cut costs, americans have this philosophy of going all in and losing everything and then blaming communism

It’s just the time average cost of Bitcoin

So think about it, Bitcoin has been around for 10 years, and for 9 years it cost less than a thousand. So .9*1000 + .1*10000 = 1900. So if you buy at this moment in time your time average cost of Bitcoin would be about 1900. So you are essentially buying one Bitcoin for 1900 dollars right now, making it a good deal because the market rate is still 4400 dollars.

Get it? It’s a pretty simple concept.

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That looks like an average mexican chick in california

Guess I’m going to California then haha

What the fuck hahahahhaahahahhahaahahahahahahahahahahahhhahahahahhahahhahahahahahhahahhhahahahahahahahaahahahahahaahhahaahahahahahahah
Tell me you arent being serious

I'm pretty sure average Mexican girl anywhere is fucking fat. Obesity so high among latinos.

He is correct though, except he broke it down to a brainlet level so you could understand.

If you bought bitcoin nine times with price being a thousand dollars (or below), and once with price being ten thousand dollars, your average price per bitcoin would be 1900. Thats the power of dollar cost averaging - both to grow your portfolio over long term, and later to unwind it when you need the money.

Imagine you literally own a brick store. At your store you buy bricks for 90 and resell for 100. Your competitor has killed himself in a car crash, you buy all of his bricks from his family for 80. You sell all of the bricks at 100 and make an average 15 profit

ITT brainlets calling others brainlets.

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