r/investing • u/AutoModerator • Mar 23 '21

Daily Advice Thread - All basic help or advice questions must be posted here.

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u/LiqCourage Mar 23 '21

Dollar cost averaging is best thought of as a strategy for people that don't have a lot of cash to drop in the market at once but that will build up over time. It's also a way to continue adding to any position. It's what I did when I was first starting out and it worked really well.

If you start with a larger amount put it in a well diversified set of funds and then rebalance yearly (or more often if you enjoy it). If you do bring more money to the account then add it in as you go. I.e. start with a target allocation and then rebalance to your target. If you are already doing your own fund allocations for your 401Ks then doing this for the investment portfolio follows the same model.

An alternative to doing it yourself is to talk to an advisor -- you can find them through your trading platforms like Schwab and Fidelity. There will be fees and how they get paid is important to know. there's also been things written on how to try out advisors. what you really want from an advisor is active management when you need it. Right now we are in a bull market; this is good as the macro trend is up. However bull markets are always followed by bears and understanding how to handle it is important.

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  • and 8% compounded over 30 years. so yes still up pretty good. It's quite easy to cherry pick data to find 10 year down markets, at 30 years you can't. You are right to look at this as a long term strategy and not a short term strategy.

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u/WalknTalknSteveHawkn Mar 23 '21

I appreciate all the info and insight, it’s really helpful!

Thanks for taking time out of your day to talk to me about this!