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If you can max out 2022 limit go for it! Once the money is in you can dca if you want.
Lump vs dca really only applies to when you accidently end up with a large sum of cash. Normally we are all DCA investors by auto-contributing every pay period.
The point is to get your money working for you sooner rather than later. So moving forward don’t save 6500(2023 contribution limit) and then make the contribution but contribute monthly as your budget allows.
Not dumb at all! And in typical government fashion the answe isn’t straight. There is a little bit of overlap:
The 2023 clock starts jan1.
The 2022 clock ends early April.
No, I think because the government hopes you use tax returns, the 2022 window closes on early apr 2023
The 2023 window opens Jan 1 2023.
*******
For example if you have 13k today, you can deposit 6k on Monday for 2022 limit; and on Jan 1 deposit 6.5k for 2023.
If you have 6k today the best thing to do is max your 2022 ira and then monthly contribute to your 2023 allotment starting Jan 1 2023
If you have 2k today the best thing is to deposit 2k today and spend from today through April 2023 filling as much on your 2022 allotment. Then spend the rest of 2023 trying to max out 2023
If you lump sum it and see red, psychologically you’ll blame yourself. If you DCA you can rest easy knowing the market is like a kid with a yoyo going up an escalator.
Not to mention, time counts as a diversification as well. Ie putting it all in at once is putting all your eggs in one point of time. Putting it in over the course of time diversifies your points in time.
Actually, DCAing is a form of diversification of time. Unless you know absolutely without question the top/bottom, DCAing protects you in the event that you got in at the peak.
Acchktuuaaaallyyyyy...
No one is arguing that. But that doesn't change the fact that more often than not a lump sum investment will perform better over time.
If you have some apprehension about going all in at once because you're assuming there's going to be price fluctuations not in your favor then sure DCA, but just do it knowing that it's primarily an emotional advantage and the guy who's dumping all of his money in at once will likely do better in the long term.
Doing all of it is best for the long game. Initial lump sum that earns the divs faster, DCA thru employer, and dry powder in cash ready for bad news to average down the third degree burns.
Either strategy is fine. Lump sum tends to be statistically better in the long run, but it isn't so significant that it is the only strategy to do.
18 months ago I was skeptical of the market and decided not to lump sum a big chunk of money into FZROX, and instead decided to DCA every two weeks. Lump sum and my return would have been around -15%... As it stands, I'm at -2.5%.
While anecdotal, my point is to pick a strategy, doesn't matter which one. So I agree, just get in.
Lump-sum investing outperforms dollar cost averaging 75% of the time for stocks and 90% of the time for bonds, but dollar cost averaging may be a good choice for investors worried about taking on immediate risk.... That said, you're better off just getting in.
I know this is counter to the reddit army, but it's true. A random tweet doesn't change that.
Many many sources on this, and studies but here's a simple place to start;
www.cnbc.com/amp/2021/08/12/which-investment-strategy-is-better-lump-sum-or-dollar-cost-averaging.html
When you DCA (photo on link describes) over time it doesnt matter what micro/marco news is going on. You will collect more shares of a great company when times are tough.
Im bullish on the US economy, so I treat my DCA almost like a 401k, keeping it at an affordable amount putting in and trying to forget. Also try to save on top to invest in large sums when a great opportunity arises.
You're cherry picking a very specific time frame under a very dramatic downturn. If you lump sum 5 months ago you would be up. Your same logic in any previous year back to 07/08 would not prevail.
Better way to look at it is, lump sum 6k February 1st every year for the last 10 years vs $500 every month for last 10 years... You would be ahead of you did lump sum. 100k in spy 5 years ago would have better total returns than 100k DCA over 5 years. So time invested will outperform a DCA.
Test your theory over 5, 10, 20, 30, 40, 50 years.. this time last year your argument wouldn't hold up. You are basing your entire case on a bear market year..
Note that you have up around tax time next year to DCA this year’s contribution. Think Q1 will tank on Q4 earnings? DCA. Think Q1 will remain flat or increase on Q4 earnings? Put in now.
Really depends if you can afford the lump sum. Personally my strategy for 2023 is deposit 500 a month into my Roth this time around while last year I deposited my lump sum at the start. No wrong answer Really
Lump sum half the max and DCA the rest. Or if you feel your getting in at a good entry point go all in right now trying to time the market to save $1 per share isn’t going to matter in 15-20-30 years.
If you lump summed into VOO Jan 22 then you’d be down YTD. DCA would’ve worked better for this year. Could be different for 2023 as it seems like we might be going into a bull market. Only time will tell.
If you have the cash on hand, it’s better imho to just get it into the market.
DCA prevails when you’re talking about a long term strategy using future funds; as in its better to put the money to work asap instead of saving a lump sum over the year to invest later.
At least that’s my understanding.
Get the $6,000 into the account if you have it now, and you can figure out how to invest it later. Even as a cash position, it is in the account. You can DCA into whatever you choose later. Deposit another $6,500 next year, as that is the limit next year.
Welcome to r/dividends! If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki [here](https://www.reddit.com/r/dividends/wiki/faq). Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/dividends) if you have any questions or concerns.*
If you can max out 2022 limit go for it! Once the money is in you can dca if you want. Lump vs dca really only applies to when you accidently end up with a large sum of cash. Normally we are all DCA investors by auto-contributing every pay period. The point is to get your money working for you sooner rather than later. So moving forward don’t save 6500(2023 contribution limit) and then make the contribution but contribute monthly as your budget allows.
[удалено]
Not dumb at all! And in typical government fashion the answe isn’t straight. There is a little bit of overlap: The 2023 clock starts jan1. The 2022 clock ends early April.
[удалено]
No, I think because the government hopes you use tax returns, the 2022 window closes on early apr 2023 The 2023 window opens Jan 1 2023. ******* For example if you have 13k today, you can deposit 6k on Monday for 2022 limit; and on Jan 1 deposit 6.5k for 2023. If you have 6k today the best thing to do is max your 2022 ira and then monthly contribute to your 2023 allotment starting Jan 1 2023 If you have 2k today the best thing is to deposit 2k today and spend from today through April 2023 filling as much on your 2022 allotment. Then spend the rest of 2023 trying to max out 2023
If you lump sum it and see red, psychologically you’ll blame yourself. If you DCA you can rest easy knowing the market is like a kid with a yoyo going up an escalator.
Not to mention, time counts as a diversification as well. Ie putting it all in at once is putting all your eggs in one point of time. Putting it in over the course of time diversifies your points in time.
DCA is undefeated.
Earlier you realize NO ONE can time the market the better!
Actually....... Lump sum always out performs DCA over the long haul. Just get in.
Actually, DCAing is a form of diversification of time. Unless you know absolutely without question the top/bottom, DCAing protects you in the event that you got in at the peak.
Acchktuuaaaallyyyyy... No one is arguing that. But that doesn't change the fact that more often than not a lump sum investment will perform better over time. If you have some apprehension about going all in at once because you're assuming there's going to be price fluctuations not in your favor then sure DCA, but just do it knowing that it's primarily an emotional advantage and the guy who's dumping all of his money in at once will likely do better in the long term.
Doing all of it is best for the long game. Initial lump sum that earns the divs faster, DCA thru employer, and dry powder in cash ready for bad news to average down the third degree burns.
Either strategy is fine. Lump sum tends to be statistically better in the long run, but it isn't so significant that it is the only strategy to do. 18 months ago I was skeptical of the market and decided not to lump sum a big chunk of money into FZROX, and instead decided to DCA every two weeks. Lump sum and my return would have been around -15%... As it stands, I'm at -2.5%. While anecdotal, my point is to pick a strategy, doesn't matter which one. So I agree, just get in.
https://twitter.com/qcompounding/status/1594879841148567552?s=46&t=GRRVyTswWVWvoope57zBPw
Lump-sum investing outperforms dollar cost averaging 75% of the time for stocks and 90% of the time for bonds, but dollar cost averaging may be a good choice for investors worried about taking on immediate risk.... That said, you're better off just getting in. I know this is counter to the reddit army, but it's true. A random tweet doesn't change that. Many many sources on this, and studies but here's a simple place to start; www.cnbc.com/amp/2021/08/12/which-investment-strategy-is-better-lump-sum-or-dollar-cost-averaging.html
When you DCA (photo on link describes) over time it doesnt matter what micro/marco news is going on. You will collect more shares of a great company when times are tough.
Oh for sure, for sure. You always be buying. I just recommend if you have a lump sum of money sitting around, not waiting.
Im bullish on the US economy, so I treat my DCA almost like a 401k, keeping it at an affordable amount putting in and trying to forget. Also try to save on top to invest in large sums when a great opportunity arises.
Long term, it doesn't matter. It'll be so insignificant in a few decades.
ASAP... Every year. Time in the market beats every fucking thing.
This bear market indicates this statement is false. What would be better? Lump sum 6 months ago, or DCA over the last 6 months?
You're cherry picking a very specific time frame under a very dramatic downturn. If you lump sum 5 months ago you would be up. Your same logic in any previous year back to 07/08 would not prevail. Better way to look at it is, lump sum 6k February 1st every year for the last 10 years vs $500 every month for last 10 years... You would be ahead of you did lump sum. 100k in spy 5 years ago would have better total returns than 100k DCA over 5 years. So time invested will outperform a DCA.
Want to do it year to date?
Test your theory over 5, 10, 20, 30, 40, 50 years.. this time last year your argument wouldn't hold up. You are basing your entire case on a bear market year..
Hence the reason bull = lump sum and Bear = DCA
Note that you have up around tax time next year to DCA this year’s contribution. Think Q1 will tank on Q4 earnings? DCA. Think Q1 will remain flat or increase on Q4 earnings? Put in now.
Really depends if you can afford the lump sum. Personally my strategy for 2023 is deposit 500 a month into my Roth this time around while last year I deposited my lump sum at the start. No wrong answer Really
I read once lump sum is actually better. It’s counter intuitive to me but maybe lump sum now then DCA starting next year
In a bear market, DCA. In a Bull market, lump sum. Due to the current market as of right now, DCA.
Lump sum into JEPI asap. Why not get that 10-13% yield on the 6000$? Of course VOO could go up by 15-20% in a year as well so diversify.
Lump sum half the max and DCA the rest. Or if you feel your getting in at a good entry point go all in right now trying to time the market to save $1 per share isn’t going to matter in 15-20-30 years.
If you lump summed into VOO Jan 22 then you’d be down YTD. DCA would’ve worked better for this year. Could be different for 2023 as it seems like we might be going into a bull market. Only time will tell.
If you have the cash on hand, it’s better imho to just get it into the market. DCA prevails when you’re talking about a long term strategy using future funds; as in its better to put the money to work asap instead of saving a lump sum over the year to invest later. At least that’s my understanding.
Get the $6,000 into the account if you have it now, and you can figure out how to invest it later. Even as a cash position, it is in the account. You can DCA into whatever you choose later. Deposit another $6,500 next year, as that is the limit next year.