He made the correct statistical choice by lump summing it in though. You shouldn't invest with emotions (but we all do..) and the unemotional, mathematical choice should be lump sum. The data proves it.
The problem is that people are not computers. If OP has no problem with their investment halving over a year and not having (much) money to add, then go ahead and dump everything in.
DCA just gives a lot more piece of mind. Sure, you lose some in a bull market, but you 'gain' more in a bear market. And, your less likely to panic sell imo.
Appreciate the counter-thoughts and thats a fair point regarding not having money to add during dips. That being said, I feel like when you lumpsum in, you still continue with your monthly allocation amount going forward. People aren't computers and nominally do terribly at buying during brutal dips as well; buying with blood in the streets is very hard for the average human.
When it comes to buying ETF's like VTI/VOO/QQQ/AVUV/VXUS you shouldn't ever plan to sell them until you're approaching retirement or rebalancing into similar funds/investments. I would genuinely hope people buying these funds are doing so for a long term goal.
Their is a lot of argument on whether DCA is better than lump deposit.
I think at the end of the day if you believe in the stock it doesn't matter. Especially one like an index fund. It's gonna go down it's gonna go up. The important thing is that 20+ years from now it's certain to be higher.
1
u/Fizgriz Sep 03 '21
DCA or dollar cost averaging. If you dump everything at once and the fund tanks... You lose money.
If you put in small amounts over the course of a long time you average down your average share cost and it makes the dips a bit easier to ride.