I like this phrase; I feel like I’ve heard it long ago.
But I am somewhat curious at the responses to this question. I was under the impression that dollar cost averaging was more of an investment/portfolio management principle than a trading one.
For example, don’t the vast majority of passive investors DCA through retirement contributions at work?
Isn’t this why the S&P and other assets that reflect overall economic growth are seen as top-tier investment vehicles for average people? Because their proven history of reliable returns over decades?
Is there a distinction between DCAing and this sort of investing that I am missing?
Because if not, Bitcoin’s DCA returns look outstanding.
Sure, the % gain return is diminishing over time. But if you have a long-term bullish thesis, why wouldn’t DCAing be a good strategy if the fundamentals are bullish? Obviously, that is a subjective conclusion you’ll have to reach yourself. But if your conclusion is correct, adding to the short-term loser lowers your cost basis and increases long-term gains.
For example, I have a belief that Bitcoin will reach a double-digit market cap. Why wouldn’t I add to long-term positions during pullbacks?
Isn’t this why they say most traders don’t beat the market? Because they can’t beat the DCA returns from the S&P, BTC, or other assets in secular bull markets?