Dollar Cost Averaging VS Lump Sum Investing |
Vložit
- čas přidán 30. 04. 2021
- In this snippet from our exclusive interview with @JL Collins we go over whether you should use Dollar Cost Averaging or Lump Sum Investing.
-----------------------------------------------------------------
Enjoy the video? Consider subscribing to our channel, it really helps us out! And it’ll make sure you never miss another video ;)
More resources:
►Our Podcast: bit.ly/2K37hN0
►Blog: www.choosefi.com/read/blog/
About us:
Everything we do, we do to help you slash your expenses, crush debt, and build ways to earn a living remotely by starting online businesses. Then we help you invest in the safest way we know how, despite the ups and downs of the stock market.
Every video is packed with content and actionable tips, and we get you from how to wow in 3 minutes. That's right - give us 3 minutes, and you'll get the step-by-step inside scoop on how to make and save more money, then make that new money go to work for you.
We take the hits, so you don't have to, because ultimately, we want you to become financially resilient during these trying times, and get you started on the path towards Financial Independence.
CONNECT:
►OUR WEBSITE: choosefi.com
►BUSINESS EMAIL: feedback@choosefi.com
JOIN THE COMMUNITY:
►FACEBOOK: bit.ly/3eh42PP
FOLLOW US:
►FACEBOOK: bit.ly/2XxEcRR
►TWITTER: bit.ly/2XznOQU
►INSTAGRAM: bit.ly/3a7mt68
►PINTEREST: bit.ly/3enOQAK
Fantastic video! I genuinely have a query. How would you suggest that we enter the market for someone with less than $300,000 to invest? Instead of making an emotional investment and losing money, I plan to observe certain traders and adopt their method. How do you feel about this strategy?
The strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skillset/knowledge to pull such trades off.
True, until their own emotions burn them out, many people minimize the importance of advisers. I needed a big boost to keep my firm afloat following my protracted divorce, so a few summers ago, I looked for licensed consultants and found someone with the highest qualifications. Despite inflation, she has assisted in increasing my reserve from $275k to $850k.
How do I get involved in this? I am excited to take part because I genuinely want to build a stable financial future. Who is the main inspiration behind your accomplishments?
Amber Dawn Brummit is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thank you for sharing, I must say, Carol appears to be quite knowledgeable. After coming across her web page, I went through her resume and it was quite impressive.
I always enjoy JL's views and inputs on investing. I usually do averaging, but every once in awhile a lump sum opportunity presents it self. Thank you for the perspective!
This man needs to start reading bedtime stories. His voice is calming to me. 😆
But then he'd have to un-retire.
He has a CZcams video that is a guided meditation for those who are panicked during a bear market lol
Thank you for uploading this version/portion of JL Collin's interview. It's great to hear his advice without all the sound effects.
I have done this by investing all at once and then investing a few thousand a week on the second lump sum and while it's hard to swallow , i think investing all into the stock/mutual fund you have chosen is the better way to go. I love Jack Bogle and it's always an index fund.
JL and your podcast is 💰keep up the good work 🏆
I learned something, so I upvoted the video.
If the statistics say it's a 25% vs 75% advantage for lump sum, would it make sense to lump sum 75% of your money and then DCA the rest?
I cashed out a pension in December of 2021. I took the lump-sum approach and put it all into VTSAX. Had I known that the market was soon to drop, I would have waited, and dollar-cost-averaged. Heck, had I owned a crystal ball, I would have instead bought a bunch of winning Powerball lottery tickets and been forever done with this entire topic. But since I didn't have a crystal ball, I chose to stick with the plan and I lump-sum invested.
Did I make the wrong decision? Well, it depends on how you define right vs wrong decision. My definition of right decision is to formulate a long term plan and to follow it no matter what. I'm going to let Jack Bogle be my guide and going to focus on time in the market, and not on timing the market.
I'm curious to look back 20 years from now to see how things shake out.
umm, you made the wrong decision. All signs were pointing to a massive bubble in all markets. You should have at least DCA'd, if not hold out completely. JL is a smart cookie, but he isn't mr. know-it-all. For example, his famous "Gambler" video says not to buy a house, and instead rent. He himself owns a house. Had I listened to him, I'd have been forever dependent on the shitty renters market we have been for quite a number of years. I am glad I bought, and paid off my home. One less worry, and a true "Fuck You" position.
@@dadventure-tales You're exactly right. Them hindsight glasses are way more clear than my crystal ball was last year!
The logic for lump sum investing is based on the fact that the market goes up in 3 of 4 years. And because of this, studies show that lump sum investing beats dollar cost averaging 75% of the time. However, my decision to lump sum invest in 2021 was a risky one because the probability of the market going up yet again, after massive gains for a decade, was far lower than 75%.
I think this is an example of where the logic for lump summing falls short. Just because the market goes up 75% of the time, doesn't mean that it has a 75% chance of going up next year!
DCA is not a good idea in a bull market, but in a bear market or downturn it’s better in my opinion.
Very smart. That’s exactly correct.
DCA-ing my excess cash slowly was the worst investing decision I made (so far). The odds are significantly stacked in favor of lump sum-ing excess cash. What really matters is first really thinking long and hard about your asset allocation and then go all in (& rebalance). Worked wonders for me after I started operating in this way.
It really depends, right now there are a lot of layoffs and what not. It's best to dca when the market is really unstable and interest rates are super high.
DCA is always better. Lump sum is basically like trading on one stock and hoping the price increases. Highly risky. I've never lost money doing dca. I;m gonna dca 500K, 10k a week but i would never buy a single stock for 500k so why would i buy a single etf for 500k? most people cant invest because theyre too greedy and not calm and peaceful. I would recommend people meditate for 20mins every morning and do DCA into any investment you like. automate it and check your balance at christmas
At 4:15 of the video he says investing in lump sum doesn't work in your favor. Contradicting what he originally said. That part confused me. Anyone else notice that?
He meant dollar cost averaging works best at the beginning of a downturn which is less likely
There are two things that one needs to understand.
1. If you have a large amount that you would like to invest - do lump-sum investment. This would be the case, for example, if you inherited money or sold something and you won’t need to spend this money in the next 5 or so years at least.
2. If you are investing a share of your salary then do dollar cost averaging and invest every month, preferably as soon as you get your salary.
I can only afford dollar cost averaging 🙄
Whether you think you can or you think you can't you're right. Get your mind right my man, nothing wrong with DCA either. Gotta crawl before you walk, you got this! 💯
Then, by definition, you're not DCAing. If you invest $100 a month because that's what your monthly budget leaves you to invest, then you're lump sum investing $100 a month. DCAing would be if you had $1200 to invest right now, but made the conscious choice to invest $100/month for the next year.
@@ASimoneau Actually in the video JL Collins says if you're investing every month in a sense you *are* DCAing, but really that's the only practical option you have.
Where can I find a 2050 almanac Doc Brown? 🤣
Lump sum investing is scary.
It definitely can be until it isn't... I recently made my largest lump sum investment ever of $5k and though I was nervous, I trust the due diligence I've done. Research and education gives you a slight hedge against fear 💯
5k🤣@@qmakesithappen
@@fitta74 yup, my FIRST 2 years ago. I’ve invested $130k total since then with my largest lump sum being $58k. Gotta crawl before you walk. As my income continues to increase so will my investment amounts 💯🏁
@@qmakesithappenTry doing that with $50k instead of $5k. Better yet, try doing that with $500k instead of $5k
To play devil's advocate, if a smart person used statistical analysis and looked back at the history of the stock market, I highly doubt that the 75/25 likelihood of the market going up each year would hold true of you looked at the number of consecutive years that the market has been up or down.
To say it another way, let's say that the market has been up, year after year, for 10 consecutive years.
Do you think that statistics would still predict another up year to a probability of 75%?
I think there's some logic missing from JL's argument.
Whoever edits these videos has to stop the cutting to pictures….it’s horrible