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Unpopular advice - but the empirical data shows that counter intuitively lump sum buying (even at an ATH) beats DCA in almost all cases over time

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by COINS NEWS 286 Views

I think DCA is an excellent strategy, and it's what I do because of the nature of my financial situation, but for those who are investing in crypto from their pre-existing savings and who have an assigned budget they are planning to invest, the empirical data says that lump sum buy strategies almost always beats DCA.

This article does a good job of summarising both the theory and practical aspects of why lump-sum investment mathematically beats DCA over the long term (and most of us here appear to be long-term investors)

https://www.dimensional.com/us-en/insights/taking-stock-of-lump-sum-investing-vs-dollar-cost-averaging

Also on the subject of data, this is a really unpopular opinion, but there is a huge amount of empirical data to show that TA rarely if ever works, and buy and hold beats day trading for almost all investors.

*For those arguing about this, try and find a period in crypto over more than 3 years where DCA'ing a fixed sum over the long term beats cash injecting it immediately. The longer the time period you take to inject the money, the less you make in almost all cases.

submitted by /u/chance_waters
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