Flirting with Models

Research Library of Newfound Research

Tag: dollar cost averaging

Dollar-Cost Averaging: Improved by Trend?

The choice to lump sum invest (“LSI”) or dollar-cost average (“DCA”) is one fraught with emotion. Intuition tells us that LSI likely offers the best bet for long-term investors as markets, in general, tend to go up. However, can signals derived from simple trend models offer an edge?

Should You Dollar-Cost Average?

Dollar-cost averaging (DCA) is often touted as superior to lump sum investing, but there are many scenarios where DCA may be inferior. The market environment and investor behavior both play large roles in the decision of which route to take.

When ingredients spoil

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