DCA works because
- It removes the risk of going "all-in" at exactly the wrong time.
- Of course, you also give up the possibility of going "all-in" at just the right time, but very, very few people (and I'm talking about the pros here, too) can do that consistently.
- Plus, most of us have a long accumulation phase;
- we don't have a huge chunk of money to invest at any one time anyway.
- Our potential investment dollars are coming in small doses with each paycheck, making them natural candidates for DCA.
Where to apply DCA?
- DCA + Mutual Fund
- DCA + ETF (search my blog for "ETF)
- DCA + Investment-Link Life Insurance Policy
Please give comment if I have miss anything.