Investing good/bad time

[Dave Hess]

Not to rehash old thread...

Imagine if the OP invested Lump Sum on October 22, 2015 and took a big hit due to crazy low oil prices ???

OP would be crying that he invested 100% of his entire money last year. Even Healthcare mutual fund or ETF would have been hit hard by energy situation.

 

[Dave Hess]

Quote:
But the thing with all of this is, that in personal investing, like it or not, there is indeed some level of emotion that gets tied in. Said emotions get stirred up pretty bad if six months after a lump sum entry, it is way down. Of course, it could be up a little or a lot after the same six months...

But my read on the OP's point (and mine as a result) was that, in essence, the guilt of putting in a lump sum at once and chancing a hefty loss when markets seem somewhat high, is worse than the opportunity cost of doing DCA as an entry and watching carefully.

Of course Vanguard has studied that very situation as well (linked on the first page), but there always is a mental component IF someone sees a loss right away.


I agree 100%. Lots of people can't (will not) invest all at once and be very unhappy if market has a downturn.