Does dollar cost averaging always work? Or is it a misconception?

Assuming value never goes to zero:

1. When the value is decreasing over time, DCA works better than a lump sum.

2. When the value is increasing over time, lump sum works better than DCA but only if you already have the lump sum at the beginning. (We're not talking about saving up then investing in a lump sum.)

If you are pessimistic or if you do not have a lump sum at the start, DCA is good.

Hello,

Depends on what type of security you are investing in. The whole concept of the DCA is that you buy on a monthly basis and eventually because some months you buy high and some months you buy low, eventually it averages out the price of the security you bought per unit. I feel that many people do not talk about this but what happens when the price of the security continues to fall month after month and has so signs of reversal? You end up buying in at lower and lower prices which can be viewed as a benefit of the DCA but also if price does continue to keep falling you will end up losing more money. Hence the answer you are looking for is the DCA does not always work. It certainly works for securities that have very strong fundamentals and the price over time will appreciate. Let me know what you think!

Cheers

Cheers!