Official Investing Thread

Discussion in 'The Mainboard' started by Joe Louis, Jul 12, 2010.

  1. Tug

    Tug Well-Known Member
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    It’s the literal definition of DCA
     
  2. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    then it's meaningless investing jargon

    (but again, the wiki you posted shows there is an absolute ton of debate on this issue, where oddly the formulation shifts based on the criticism leveled which is kind of a tell.)
     
  3. Tug

    Tug Well-Known Member
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  4. The Hebrew Husker

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    Yeah, I wasn’t sure there was some fine print saying the average cost had to decrease at each investment.
     
  5. Whammy

    Whammy Donde es
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    This is dumb, amass cash and buy the bottom
     
    #28705 Whammy, Oct 17, 2022
    Last edited: Oct 17, 2022
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  6. Tug

    Tug Well-Known Member
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    It’s all meaningless jargon, but it isn’t meaningless jargon because you don’t understand it, it’s meaningless because I’m reality it’s all fake
     
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  7. brolift

    brolift 2sweet
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    Anyone buying callable muni bonds right now? Heard them mentioned on Forward Guidance but dn't know much else thanks

    they're allegedly tax free depending on where you live
     
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  8. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    • Dollar-cost averaging aims to prevent a poorly timed lump sum investment at a potentially higher price. (this is not deploying capital as received)
    • Dollar cost averaging can lower the average amount you spend on investments. (this is just buying as capital as received under the pretext stock market go up over time, good!)
    • It can ensure that you're already in the market and ready to buy when events send prices higher. (this is timing the market, bad)
    • It takes emotion out of your investing and prevents you from potentially damaging your portfolio's returns. (emotional hedge as stated)
    what are we even doing here at this point
     
  9. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    its meaningless jargon because the articles you cite literally aren't coherent or logically consistent
     
  10. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    timing market bad
     
  11. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    always be deploying
     
  12. Whammy

    Whammy Donde es
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    What is this cult
     
  13. Whammy

    Whammy Donde es
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    I personally am relieved to have been in cash since March
     
  14. The Hebrew Husker

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    Lyrtch I ask you this seriously.

    I make a Roth contribution every paycheck, about 15-20% doesn’t get invested automatically so it just sits as cash. Anytime the market is down 2-3% I’ll try to invest some of that cash balance “manually”. Is this what you consider DCA?
     
  15. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    thats just trying to time the market, so no
     
  16. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    DCA is putting $5k a month in your investing account but spreading the actual purchases out over 4 weeks instead of at deposit date.
     
  17. The Hebrew Husker

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    So don’t time the market, but also don’t automatically invest a consistent $ amount on a consistent schedule. Got it.
     
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  18. The Blackfish

    The Blackfish The Fish in Black
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  19. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    Invest all capital you intend to invest as it's received. Delaying for any reason is a losing strategy over the time threshold most of us are on (20-30 years or more).
     
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  20. aisle seven

    aisle seven Well-Known Member
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    I feel like this posting style is a rip off of Chris Hayes and it annoys me.

    thanks,
    Wayne
     
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  21. southside

    southside Well-Known Member
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    yes. lots of gambling lol

    also lot of that 0DE options driven by insto's obviously (the 40%), as that's the only place where you can find liquidity on size right now. bigger funds aren't deploying here for longer term positioning
     
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  22. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    fwiw i dont watch chris hayes
     
  23. aisle seven

    aisle seven Well-Known Member
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    Watching does not equal posting. Words have meaning!
     
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  24. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    my post was worded intentionally
     
  25. Ty Webb

    Ty Webb Living rent free in Jigga's head
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    I choose to fund my 401k over the course of the year vs all in January.
     
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  26. Paddy Murphy

    Paddy Murphy Well-Known Member
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    Lyrtch at this rate you probably need to disclose that past performance doesn’t guarantee future results and what fees you charge with this cocksure financial advisor schtick.

    If the Capital you intend to invest is a thousand dollars a month or like less than 5% of your net worth, then yes, on sight.

    If you get a check thats equal to 50% of your net worth it makes sense to put it in over time because, inherently, risking that much at a moment in time valuation is actually a much worse version of trying to time the market.

    There are different approaches for every situation.
     
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  27. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    this is -ev if you have the option to do it up front (and if it doesn't impact the employer match options)
    this is also -ev as endless research has shown
     
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  28. Whammy

    Whammy Donde es
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    DCA’ing into the teeth of a bear market seems -ev but I am not Jack Bogle
     
  29. Lyrtch

    Lyrtch My second favorite meat is hamburger
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  30. Tug

    Tug Well-Known Member
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    No one knows what you’re doing
    I didn’t post any articles. I posted a wiki and an investopedia giving you literal definitions. DCA definition isn’t determined by your ability to set aside money to a special account. It’s literally incremental purchases of the same dollar amount at scheduled periods such that your average cost of the investments is averaged.
     
  31. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    then the wiki and investopedia articles are making claims that are not bound by this formulation

    as seen by the parts i copied out of these articles that are just "literal definitions" that don't fit that
     
  32. Tug

    Tug Well-Known Member
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    This isn’t even a true statement. The definition is there. You added superfluous justifications. It’s irrelevant as to whether or not you set aside money for investing or do auto deductions from paychecks. You’re completely wrong on this
     
  33. Paddy Murphy

    Paddy Murphy Well-Known Member
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    Please post the research. I understand that the overall conclusion is going to be “lump sum out performs DCA on average”. What I am interested in is, in the cases where it didn’t, how severe was the penalty? Is it 5% of the time or 25% of the time this happenss? Do you end up down 5% or 25% relatively?

    Would you rather outperform by 5% over 10 years in exchange for a 1/10 risk you underperform by a much wider margin?

    maybe your research answers this. I’m glad to concede the position as theory if so.

    wont change that I DCA, but hey, at least you will be right.
     
  34. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    they're justifications literally listed in the encyclopedias that don't make sense based on your chosen restrictive definition

    its ok, we can disagree, there's literally entire pages of dispute about it on said articles. i think your restrictive definition is illogical based on all the contextual components outlined in these "definitions".
     
  35. Tug

    Tug Well-Known Member
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    There is no restriction on whether your capital is paid as received or whether it’s from some investment fund. You’re attempting to split hairs and avoid the actual definition.
     
  36. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    I posted just that one vanguard study above but academics have been studying this for a long time and continue to be confounded by DCA'ing maintaining its popularity, which is silly because it's an emotional hedge, people are very emotional. Many advisors also press it because of said emotional hedge before even getting into the financial considerations.
     
  37. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    The former version removes all benefits outlined for DCA in these same definitions. It's no longer an emotional hedge, it's no longer decreasing perceived volatility, its only "lower cost" in the formulation of deploying all capital as received. It's positioned as an alternative to lump sum investing which makes no sense in your frame.

    It's not a logically coherent position if your definition is THE definition. https://corporatefinanceinstitute.c.../trading-investing/dollar-cost-averaging-dca/

    none of the benefits there are valid under your preferred formulation
     
  38. Tug

    Tug Well-Known Member
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    To be clear, I never stated it was an emotional hedge nor do I care. DCA is investing in a predecided investment, with a predecided amount, on a predecided schedule. Directly contrary to your statement, it doesn’t matter if it is a lump sum in a predetermined investment fund or if it’s on a monthly basis from cash flow activities. It’s still DCA
     
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  39. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    ok cool
     
  40. Paddy Murphy

    Paddy Murphy Well-Known Member
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    Thank you and that’s the exact research piece and analysis I was hoping for.


    I would just argue with your absolutism when the report you posted shows lump sum beats DCA only 2/3 of the time while the average cumulative premium for lump sum was 5% over ten years, while the downside case is -20%. Accepting a base case that is 95% of what’s possible to better position for avoiding the case where you make 80% of what’s possible isn’t some emotional weakness, it’s a reasonable risk analysis.

    ETA: Especially applied to my original point which that DCA makes sense when the dollar amount tangible to your net worth.
     
    #28740 Paddy Murphy, Oct 17, 2022
    Last edited: Oct 17, 2022
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  41. Joystick Izzy

    Joystick Izzy Well-Known Member
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    Lyrtch is technically correct. DCA is simply an alternative to lump-sum investing when you have a sum of cash on hand to invest. Investing regularly as you get paid is not the same as DCA, though they do get confused all the time.
     
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  42. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    most of us have investing timelines far longer than ten years where it continues to slip further and further towards LSI. I'm a conservative investor and think the risk calculation required to go DCA over LSI is faaaaarrrr too conservative especially with the data in that piece about risk adjusted returns, etc. My goal is to make the most positive value decisions I can make, the expected value of DCA vs LSI just doesn't hit and why that piece talks a lot about the emotional benefit of doing it vs the functional benefits.
     
  43. Paddy Murphy

    Paddy Murphy Well-Known Member
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    This is fine, and sound. It’s just no absolute, that’s all.
     
  44. grimreeper46

    grimreeper46 Active Member

    After seeing the markets soar I thought to myself “hey, better check out the investing thread, I’m sure it’s a bunch of positivity”

    lolwrongnumber - just a bunch of arguments over semantics.

    Never change tmb
     
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  45. C A N E

    C A N E Let justice be done though the heavens fall
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    mannn we're gonna give it all back. probably. maybe.

    luckily i am DCAing into the market vs doing a one time lump sum
     
  46. billdozer

    billdozer Well-Known Member
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    I'm probably going to DCA my DCA paycheck money
     
  47. C A N E

    C A N E Let justice be done though the heavens fall
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    That sounds like small lump sums to me
     
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  48. billdozer

    billdozer Well-Known Member
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    I'm putting 1% in every 1/2 hour. Gotta make sure I catch the bottom.
     
  49. burnttatertot

    burnttatertot butt tuck zoomies
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    Not looking to get thread banned or anything but I agree with Lyrtch
     
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  50. Sportfan

    Sportfan From Six to Dumptime
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    Let’s all get back on the same page and just collectively whine about how much our retirement accounts are down since thanksgiving.
     
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