Do you guys think that DCA or LSI in an ETF is a better strategy for the market climate now? - Seedly
 

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Asked by Tan Wei Jie Shawn

Asked on 17 Jun 2018

Do you guys think that DCA or LSI in an ETF is a better strategy for the market climate now?

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Lee Jiahui
Lee Jiahui
Level 5. Genius
Answered on 19 Jun 2018

I follow DCA + LSI in downtrend at prices below historical mean. Most important thing is never ever change your strategy depending on the market. In 2015, I did DCA in a uptrend market and did lumpsum in downtrend which cost me a lot of money and i regretted. I believe that buying lump sum multiple times as market is falling as the best hedge. Cos most of the time, i am just collecting and saving money and ignoring what others say about my cash value depreciating. I rather see it virtually depreciate 1-2% than to see a paper loss of 10-20% from buying above the historical mean.

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Boonhow Eng
Boonhow Eng
Level 3. Wonderkid
Answered on 19 Jun 2018

it depends which market you are DCA-ing into. if US market, CAPE and PE is slightly over heated, if you expect it to drop, then do DCA.

but you think it is going to fly upwards, lump sum is better.

SG market is not as overheated. of course, it all depends on if you are able to do any valuation on your own side. If you know nothing, DCA-ing all the way brings no harm.

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Gabriel Tham
Gabriel Tham
Level 8. Wizard
Answered on 19 Jun 2018

Either way works.

You can DCA with a lump sum on a yearly basis. Every year accumulate a lump sum and buy ETF. Over a period of 10 20 + years your annual lump sum investment is essentially a DCA with a yearly input.

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Luke Ho
Luke Ho
Level 6. Master
Answered on 18 Jun 2018

Statistically, its always Lump Sum investments. The initial analysis was carried out by Vanguard has been replicated repeatedly since. The market is in an upward trend 2/3 or more of the time.

DCA is really only for people who don't have the money on hand to do LSI, or who would like to do aggressive investments but reduce some of their risk.

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Marcus Goh
Marcus Goh
Level 3. Wonderkid
Answered on 18 Jun 2018

I'm into Dollar Cost Averaging aka Regular Savings Plan as you don't have to time the market and you purchase more shares if the market is going down and vice-versa. it's also passive which allows you to sleep peacefully at night knowing that your money will compound over time.

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Gabriel Lee
Gabriel Lee
Level 6. Master
Answered on 30 Jun 2018

I would do DCA too since I don't have to time the market, can easily set up the RSP via POSB investsaver

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Phyllis Poon
Phyllis Poon
Level 2. Rookie
Answered on 19 Jun 2018

With ups and downs frequently, I will dca instead

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Jerry Tong
Jerry Tong
Level 1. Freshie
Answered on 19 Jun 2018

dca more for pple who are starting slowly and

wants to have a try at investing.

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Hannah Foo
Hannah Foo
Level 3. Wonderkid
Answered on 18 Jun 2018

I'm for Dollar Cost Averaging, as you don't have to time the market. But the downside is that there is a need to pay a transaction fee on a regular basis and that can add up to be costly

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