Chapter 6 Conclusion: What is DCA Investing?
Chapter 6 Conclusion: What is DCA Investing?
This list contains several psychological effects such as ââÅ¡¬ÃƒÆ’…relief from falling prices,ââÅ¡¬ ââÅ¡¬ÃƒÆ’…recovery from losses,ââÅ¡¬ ââÅ¡¬ÃƒÆ’…no timingââÅ¡¬ and ââÅ¡¬ÃƒÆ’…no predictingââÅ¡¬ as well as familiar values such as ââÅ¡¬ÃƒÆ’…continuity.ââÅ¡¬ These are all psychological effects that serve to relieve the stress associated with investing. I believe that this unquantifiable ââÅ¡¬ÃƒÆ’…peace of mindââÅ¡¬ can only be found in DCA investing. Up to now, the value and measure of lump-sum investments have been represented in quantifiable terms such as ââÅ¡¬ÃƒÆ’…profit,ââÅ¡¬ ââÅ¡¬ÃƒÆ’…yield,ââÅ¡¬ ââÅ¡¬ÃƒÆ’…investment efficiency,ââÅ¡¬ ââÅ¡¬ÃƒÆ’…costââÅ¡¬ and ââÅ¡¬ÃƒÆ’…risk.ââÅ¡¬ These are all quantitative values expressed on the number line. If you always chase ââÅ¡¬ÃƒÆ’…quantitative values,ââÅ¡¬ you may increase the risk of losses. Risk and returns is a tradeoff. The world of investing shows us that Low Risk = Low Return = Low Stress, and High Risk = High Return = High Stress. On the other hand, DCA investing described in this booklet is not necessarily a highly efficient means compared with lump-sum investing. This was demonstrated with a fund that increased 100 times but only provided a profit of 5 times the total value of the DCA investment. Definitely itââÅ¡¬ÃƒÆ’¢Ã…¾¢s not going to make you a fortune. As a tradeoff, it provides peace of mind thanks to its ââÅ¡¬ÃƒÆ’…rapid recovery from losses.ââÅ¡¬ In an investment climate where market crashes occur every few years, the ââÅ¡¬ÃƒÆ’…resilienceââÅ¡¬ of DCA investing is a feature of paramount importance to investors. It's a ââÅ¡¬ÃƒÆ’…Medium Risk = Medium Return = No StressââÅ¡¬ investment method. DCA investing is in no way universal. It has good aspects and bad ones. What's important is to understand its features and formulate an investment strategy that fits your life plan. Please try to view it as one of your investment choices. I would be thrilled if this booklet helps you manage your investments.
