> This is true despite the fact that you know exactly when the market will hit a bottom. Even God couldn’t beat dollar-cost averaging.
I'm a bit unconvinced by the studies that say this, because I don't think the "buy the dip" strategy they're talking about is the same one that people are running.
The studies describe waiting for a low point in a given year (or even across multiple years!) then lumping in all your money then.
Whereas I think what people actually mean when they talk about buying the dip is shifting their dollar cost averaging buy-in by days, weeks, or at most a few months, while they wait for the market to get spooked.
I don't do this at the moment. I had a "wait for the US president to say something stupid" strategy which seemed to work for a while, but of course I don't really have enough evidence to back that up.
I'm a bit unconvinced by the studies that say this, because I don't think the "buy the dip" strategy they're talking about is the same one that people are running.
The studies describe waiting for a low point in a given year (or even across multiple years!) then lumping in all your money then.
Whereas I think what people actually mean when they talk about buying the dip is shifting their dollar cost averaging buy-in by days, weeks, or at most a few months, while they wait for the market to get spooked.
I don't do this at the moment. I had a "wait for the US president to say something stupid" strategy which seemed to work for a while, but of course I don't really have enough evidence to back that up.