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 .
Its a good idea to think of investing as an activity with a timeline in decades. If I buy a ten-year bond at 4% annual interest today, and a year later the same government is selling nine-year bonds at 5% interest, nobody will pay me the face value of my first bond. A year after that, maybe an eight-year bond is yielding 3%, and people will pay me more than face value for the first bond. I only know how much I made after inflation when ten years are up.