I've been dollar cost average buying for a few days now. Not too much, a few tens of thousands of dollars a day. Please carry on with the panic, everyone.
Congratulations on being rich and somehow dumb enough to think you can time the market while also believing that dollar cost averaging is a good strategy. If you are so sure you know where the bottoms are, just buy them. Don't waste your time with DCA.
I don't know why you call it dumb. This is what happens in every down turn. The people with money take advantage and increase their possessions while the people without money lose theirs. The rich get richer. The more severe the down turn, the more drastic the swing.
Instead of having all these tens of thousands of dollars sitting around, he should have invested them years ago.
Some people think they're clever by waiting to "buy the dip"; others think they're being clever by "spreading out the risk" (with DCA). They're both silly attempts at market-timing.
Our OP commenter is a unique doofus who has come to HN to brag about combining two different (& contradictory) losing investment strategies.
Dollar cost averaging works for me because I didn't have those dollars sitting around last year. Like most people my main source of investment funds is my 401k contribution which is divided up over the course of the year.
I suppose in theory I should have figured out the entirety of my 401k contributions from the time I start my first job until I retire, take out a loan for that amount and invest it, then when I retire pay the loan off. The numbers work out on paper, but nobody would give me such a loan so in practice it doesn't work even if the tax advantages would be allowed for such a scheme.
Did you even read the article you linked to? Of course dollar cost averaging doesn't work when the market is only going up, but that's not what's happening right now. The one third of the time when DCA works is when the market experiences a wild swing in price and then returns back to where it started, which means that unless you actually expect the US economy to collapse and remain in a collapsed state for the rest of your life, dollar cost averaging is the strategy to employ in this situation.
OP said nothing about timing the market. As you mentioned, that's the entire opposite of DCA. I take your interpretation to be a bit disingenuous and lacking in good faith.
OPs point is clearly that the panic selling is not rational and they are acting accordingly. Whether or not that's correct remains to be seen, however.
It pays to remember that when one sells their shares, there is someone else who's buying at the other end of that trade. Right now that someone is me. 20+% discount sounds pretty awesome even if it's not "the bottom". I typically buy and hold, and not worry too much about turbulence, since I'm not on margin.
Please don't break the site guidelines regardless of how bad another comment is. Also, please don't feed egregious comments by replying. That's also in the guidelines: https://news.ycombinator.com/newsguidelines.html
Personal attacks will get you banned in particular, so please don't do those.
25 comments
[ 3.1 ms ] story [ 59.0 ms ] threadInstead of having all these tens of thousands of dollars sitting around, he should have invested them years ago.
Some people think they're clever by waiting to "buy the dip"; others think they're being clever by "spreading out the risk" (with DCA). They're both silly attempts at market-timing.
Our OP commenter is a unique doofus who has come to HN to brag about combining two different (& contradictory) losing investment strategies.
I suppose in theory I should have figured out the entirety of my 401k contributions from the time I start my first job until I retire, take out a loan for that amount and invest it, then when I retire pay the loan off. The numbers work out on paper, but nobody would give me such a loan so in practice it doesn't work even if the tax advantages would be allowed for such a scheme.
OPs point is clearly that the panic selling is not rational and they are acting accordingly. Whether or not that's correct remains to be seen, however.
Personal attacks will get you banned in particular, so please don't do those.
https://news.ycombinator.com/newsguidelines.html
https://news.ycombinator.com/item?id=22525238
https://news.ycombinator.com/item?id=22525238