Crossposted from https://lemmy.ml/post/48918911
The irritating DCA thing is just a manipulation from bankers , stimulating the worst possible gamblers mistake - chasing losses. DCA claims it averages cost of participation, but that is a pure fallacy: these are independent events and probability of winning does not increasing with each “entry” even a cheaper one. What bankers are proposing to you is that you play again to cover previous losses. But the next play has the same probability to losing as the first one .
So the error there is that purchases are not actually independent. If say dot com stocks have been growing ten times as fast as the rest of the stock market, they can't do that forever (eventually they will become the whole stock market, then the whole economy). If a government keeps offering higher and higher real interest on bonds, eventually it will default or trigger high inflation. So the wise investor buys lots of different things, knowing that today's darling will be tomorrow's ugly sister. I recommend a good textbook.
If you don't believe me or don't get it, I don't have time to try to convince you, sorry.