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Anonymous
Am I getting DCA (dollar cost averaging) right?
Say I DCA $1000 monthly into Stock X which is currently priced at $900.
But what do you usually do in situations where the stock price increases to e.g., $1200? Do you then change your DCA amount for that particular month? Or hold off purchasing stock this month and then DCA the next month when you’ve $2000 accumulated?
Help a confused soul 😅
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CommonSense Investor
19 Oct 2021
Certified Professional at Biotechnology and Gene Therapy Industry
Welcome to the TSLA DCA gang hehe!
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The point about DCA is for investors who believe totally that they market cannot be timed and that they will be better off by being disciplined by investing a fixed sum of money at regular intervals, regardless of the price movements. That is the essence of DCA. However when put into practice, it is not the most efficient way of deploying your capital in terms of risk to reward setup. There will be occassions that you are risking too much for too little. Likewise you might also be too defensive than you should at times too.
Perhaps this might be a useful video to learn about our thoughts at well at https://www.youtube.com/watch?v=gKI-EuNPAmU
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You can consider Value Averaging (VA). Take a look at https://seedly.sg/opinions/what-do-i-dollar-cos...
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How many stocks that are $900 out there that's worth employing DCA strategy?...
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You just have to put more money to DCA your high conviction stock.