Is DCA buying into a single ETF over the next 10 to 20 years a good plan?

Hello!

In general, DCA as a strategy has statistically proven to be worse than Lump Sum investing (LSI). DCA may be better for you psychologically, as we as humans are conservative by nature, but it may actually erode at your real returns. The exception would be if you are DCA-ing as you do not have the capital currently to invest.

In addition, buying a single ETF may be a bit riskier than buying a basket of ETFs. If you do decide to buy a single ETF, you should see the performance of the ETF against the stock market (S&P 500, STI, etc) over the last 5-10 years and make a decision from there. Also read up a bit on the ETF fund management and their expense ratios.

Hope this helps!

I think it is a working strategy, there is no doubt that there will be some amount of return. However, I do think that you might want to invest in other forms of asset classes rather than only equity.

It's a viable strategy but I would invest in a handful of ETFs instead of just one ETF. While ETFs are diversified, you can still face concentration risk. For example, I wouldn't put all my money in the STI ETF because I would be tied to the fate of the Singapore economy. A mixture of ETFs with exposure to your home market, the U.S., China, and maybe some thematic plays (if you've done your research) would be my preference.

Hi,

Something like SWRD will give you broad-based diversification that is across sectors and geographies. Unfortunately, it does not include any bond exposure which is also important for diversification.

If you are comfortable with the volatility associated with 100% equity portfolio, this can work out.