I know what you mean - it certainly didn’t seem intuitive at all to me. Buy low sell high seems like such a great strategy. But apparently even if you can execute perfectly you still fall behind.
Now of course the studies are biased - they presume we do nothing while we wait for a dip. If you can buy dips and sell for a profit consistently in individual stocks, I’m certain the data would look different.
But then again - I do know plenty of people (I’ve been guilty of this myself) that do say “the market is expensive, I’ll wait”. Sad but true.
Oh I even prefer to DCA than BTD. It's only that my mind's been circling like if I've chosen to DCA, do I just exectute it on my current positions. If so should I be DCA-ing lower amounts when the stocks are rising and higher amounts when it begins to fall or vice versa. What is the ideal standard way? Not to stress, your opinion if you were in my shoes?
Difficult to say - how would you react if the market kept dipping? My personal approach is similar to what you said: buy more when the market dips. Depends on what I have in cash - luckily now we have fairly high yield options (although real return is still negative of course, once we factor in inflation). The “combine DCA with BTD” section in the article is basically this. I don’t know if it’s the best - I need to run the numbers, but works for me, psychologically. And that’s the part that matters most.
Well written with insightful graphs. Everybody seems to be chasing the dip these days. For pure investors with a day job, catching that dip in the future may never be possible because that needs careful scrutiny of the market ups and downs. This leads to missed opportunity for investing at present.
Glad you like it, Amrita! Too many investing articles and even books say things without giving an example or showing how things work. I don’t think anyone today has the time or attention span to turn words into a data vizualization, come up with a sensible number series, then plot that in their head. And do it correctly at the same time 😅
I would like to study more on this topic. It's very debatable in my head. Loved it btw
I know what you mean - it certainly didn’t seem intuitive at all to me. Buy low sell high seems like such a great strategy. But apparently even if you can execute perfectly you still fall behind.
Now of course the studies are biased - they presume we do nothing while we wait for a dip. If you can buy dips and sell for a profit consistently in individual stocks, I’m certain the data would look different.
But then again - I do know plenty of people (I’ve been guilty of this myself) that do say “the market is expensive, I’ll wait”. Sad but true.
Oh I even prefer to DCA than BTD. It's only that my mind's been circling like if I've chosen to DCA, do I just exectute it on my current positions. If so should I be DCA-ing lower amounts when the stocks are rising and higher amounts when it begins to fall or vice versa. What is the ideal standard way? Not to stress, your opinion if you were in my shoes?
Difficult to say - how would you react if the market kept dipping? My personal approach is similar to what you said: buy more when the market dips. Depends on what I have in cash - luckily now we have fairly high yield options (although real return is still negative of course, once we factor in inflation). The “combine DCA with BTD” section in the article is basically this. I don’t know if it’s the best - I need to run the numbers, but works for me, psychologically. And that’s the part that matters most.
Yes precisely. Thank you
This is amazingly written blog and especially the research is deserves a 🙌🏻🙌🏻🙌🏻.
Look forward to reading more from you.
Appreciate the kind words, Shardul! Any topics you’d like to learn more about?
Well written with insightful graphs. Everybody seems to be chasing the dip these days. For pure investors with a day job, catching that dip in the future may never be possible because that needs careful scrutiny of the market ups and downs. This leads to missed opportunity for investing at present.
It really is a tough one. Seeing the market rip up as you're waiting for it to go down... I do not wish that feeling on anyone.
Love your writing style and how you back it up consistently with data. Looking forward to your future posts.
Glad you like it, Amrita! Too many investing articles and even books say things without giving an example or showing how things work. I don’t think anyone today has the time or attention span to turn words into a data vizualization, come up with a sensible number series, then plot that in their head. And do it correctly at the same time 😅