* it doesn't help to time getting in & out long term returns are same as keep dca'ing & waiting to sell lumpsum at peak
* when to start dca in particular class - look at monthly returns through out the year of a class & decide on when to put lumpsome in play.
DCA when you bought at high price might help you recover your money faster, but don't deploy DCA for ever esp when markets are high.
* accademia is correct that you can't time the markets, so its pretty hard to say when you are at peak or valley
Here is data I ran & found SPY hardly made any money for last 16 years. Pundits will argue that you should do it with asset allocation, doesn't work either. They will recommend international should have been part of your port. Investing in internationals became popular only in 90s/00s
ROR from Jan - 93 till date held
ROR from Jan - 93 till date held
December-93 9.13%
December-94 2.94%
December-95 20.39%
December-96 21.01%
December-97 24.84%
December-98 25.90%
December-99 24.68%
December-00 16.94%
December-01 11.06%
December-02 4.60%
December-03 8.07%
December-04 8.46%
December-05 7.99%
December-06 8.83%
December-07 8.41%
December-08 2.23%
December-09 4.50%
Look at EFA after huge run, returns are near 1% if you kept buying in 2005-7 after runups in 2008!
December-01 2.5%
December-02 -13.7%
December-03 23.1%
December-04 27.6%
December-05 23.9%
December-06 25.1%
December-07 21.7%
December-08 1.0%
December-09 9.4%
FFNOX, buying at lows was good but should have sold at high!
December-99 85.48%
December-00 -6.94%
December-01 -7.78%
December-02 -12.08%
December-03 3.46%
December-04 5.96%
December-05 6.20%
December-06 8.36%
December-07 7.85%
December-08 -1.78%
December-09 2.73%
Here is rolling DCA returns for large number of portfolios. In this study, I assumed investment of $1000 per month from Jan of particular year till date (Dec5, 2009). Investments are made at end of month prices.
I added returns from Madsinger as well, not sure if methodology used by madsinger matches with mine or not. Anyhow, here are results:
| Return Since | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
| XLF | -7.73% | -8.60% | -9.50% | -10.99% | -12.88% | -14.10% | -14.80% | -12.22% | 1.94% | 64.05% | |
| FSNGX | 8.07% | 7.90% | 7.67% | 5.68% | 1.62% | -2.71% | -5.55% | -6.98% | -1.55% | 35.36% | |
| ICF | 6.19% | 4.97% | 3.59% | 1.64% | -1.11% | -3.35% | -4.60% | -1.59% | 13.77% | 90.46% | |
| Hot Hands | 10.87% | 8.27% | 5.46% | -3.70% | 20.75% | ||||||
| SPY | 1.02% | 1.46% | 1.60% | 0.92% | -0.39% | -1.23% | -1.90% | -1.05% | 8.40% | 46.18% | |
| XLU | 4.92% | 5.19% | 5.70% | 4.89% | 2.58% | 0.09% | -1.67% | -3.43% | 1.06% | 25.43% | |
| EFA | 5.44% | 4.34% | 1.96% | 0.21% | -1.50% | -0.70% | 10.93% | 56.77% | |||
| VFINX | 0.63% | -0.31% | 1.70% | -1.24% | 24.07% | ||||||
| ffnox | 2.77% | 3.17% | 3.21% | 2.53% | 1.27% | 0.47% | -0.28% | 0.40% | 8.95% | 41.49% | |
| Newsletter G-IND | 2.89% | 3.26% | 4.27% | -0.19% | 28.30% | ||||||
| Sheltered Sam | 5.27% | 4.35% | 4.66% | -0.11% | 26.69% | ||||||
| LS G | 2.64% | 2.05% | 3.35% | 0.25% | 23.35% | ||||||
| Newsletter G | 7.68% | 3.56% | 5.14% | 1.10% | 30.10% | ||||||
| Newsletter CG | 5.67% | 3.32% | 4.35% | 1.16% | 25.30% | ||||||
| Newsletter Inc | 3.43% | 3.53% | 3.30% | 1.32% | 20.80% | ||||||
| OAKGX | 9.16% | 8.34% | 7.52% | 6.12% | 4.04% | 2.77% | 1.63% | 2.66% | 14.17% | 56.57% | |
| LS MG | 3.50% | 3.09% | 3.86% | 1.76% | 19.74% | ||||||
| XLV | 2.43% | 2.34% | 2.16% | 1.82% | 1.71% | 1.81% | 2.94% | 10.93% | 37.62% | ||
| s&d | 5.98% | 5.16% | 5.58% | 1.84% | 23.60% | ||||||
| 3 fund | 3.79% | 3.40% | 5.08% | 2.32% | 24.51% | ||||||
| STAR | 5.22% | 4.38% | 4.79% | 2.46% | 23.40% | ||||||
| LS CG | 4.05% | 3.74% | 3.96% | 2.83% | 17.11% | ||||||
| coffeehouse | 5.89% | 5.47% | 5.24% | 2.88% | 18.44% | ||||||
| FGBLX | 6.83% | 7.25% | 7.23% | 6.62% | 5.39% | 4.56% | 3.80% | 4.00% | 9.92% | 33.55% | |
| Wellington | 6.00% | 5.70% | 5.84% | 4.28% | 21.75% | ||||||
| oakbx | 7.62% | 7.06% | 6.80% | 6.27% | 5.42% | 4.94% | 4.32% | 4.06% | 7.74% | 27.13% | |
| QQQQ | 4.54% | 5.42% | 4.85% | 4.09% | 4.12% | 4.40% | 5.84% | 16.92% | 53.34% | ||
| Wellesley | 5.94% | 6.04% | 5.45% | 5.42% | 16.04% | ||||||
| PRPFX | 10.35% | 10.34% | 10.10% | 9.65% | 9.21% | 9.05% | 8.76% | 9.50% | 13.29% | 31.56% |
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