Obviously if you do not hold significant cash and are going to invest your savings monthly there is no difference between DCA and lump sum investing.

[0] https://www.jstor.org/stable/2330513?seq=1

However, what retail investors should be doing is investing some fraction of their paycheck each pay cycle, or something like that. That's not the same thing. There is no lump sum at their disposal to invest - they're investing as soon as they have the money. What they're not doing is saving up cash and trying to buy the dips in lump sums, which I think most would agree is a bad idea.

So they're both investing as soon as they have the money available, and they're benefiting from the averaging, which you may or may not call 'dollar cost averaging'. It seems ideal to me, and this is what I think the comment you're replying to is referring to.

Ex. If you're 40 and think you'll live to 100, try to hold 40% bonds and 60% stocks.

Those things shouldn't change in response to short-term market fluctuations, but not all external events are limited to short-term market fluctuations.

The key is to maintain a mix that allows for short to medium term fluctuations in the market (and economy) like this.

EDIT: I highly recommend the book "A Random Walk Down Wall Street" for more details on asset allocation strategies at various ages.

Why are stocks a valid strategy (where there's possibility of easily losing 20-30%), while losing a few percent due to inflation in something like a savings account isn't?

also see cFIREsim for an idea of the math: you're basically guaranteed to run out of money if you try to park in safe havens and you end up living a fair bit after you retire.

If you are struggling to stay within a "safe" withdrawal rate of 2-3%, you may find that equities are your only chance of getting the returns that you need.

This is even more true in cases of bear markets. Since the market will most likely rise compared to where it is now, going all-in in a severely depressed market is usually advantageous.

Psychologically, of course, it is more difficult to do so as you have to go against "common wisdom".

Don't get me wrong though,dollar-cost averaging is a great strategy if you don't have lump sums laying around.

If you've already accumulated a large cash position, yes, it's almost always better to dump it in the market, but unless it was an unexpected windfall, that just means you were suboptimally failing to use DCA before.

I don't think it's wise to judge based on the peaks and bottoms. Those are the outliers. The price touched there for a fleeting moment and then backed away. I'd rather calculate a trend-line over a long timespan that covers multiple boom-bust cycles, and note when the price crosses it. When the price is below the line, that's a relatively better time to be buying, if you have spare cash, and when it's above the line, that's a relatively better time to be selling, if you have the stocks.

You'll drive yourself crazy trying to predict the optimal timing for large orders.

Putting in a little at a time, or taking out a little at a time, based on broad criteria and your own goals as an investor, is way better than intensive analysis or day-trading. Once a paycheck or once a month is fine. Even better if you can set it up to be automatic, and you don't have to think about it too much.

Unfortunately, I don't have any spare cash, but those who heeded the warning of inverted yield and switched from "gradually buy" to "gradually sell" back then probably have enough cash savings and downward movement to switch back, or to at least stop selling for a while.

Note that even if you are retired you should still have some stocks as a hedge against your retirement having more than a year left before you die.

You shouldn't be. Unless you plan to die soon and really live it up, you should be have money you need now, money you need next year, money you need next decade, etc. When you approach retirement, you should start moving the money you need now (at the point of retirement) into much less volatile investments. A year later you should move the money you need next year (at the point of retirement) into a similar vehicle. As you get closer, each bucket of money eventually moves into the safest vehicle possible (FDIC insured savings/checking account, ready for you to use it in day to day transactions). At the point of retirement, assuming you plan to live for a few more decades, most of your money should still be in the market but what you need in the short term should be in cash already and what you need in the medium term should be in a low risk investment to protect against inflation.

This is the general pattern, the exact situation depend upon your own financial situation, health situation, family situation, and many other factors that a financial/investment adviser would be able to help you with.

EDIT: saw your other reply: sadly many investment funds are just not worth it, it's not your fault, banks and similar are often incentivized to sell you a fund which has high fees and generally trails the market, the best choice is to invest in low cost index-tracking funds, but this is not obvious knowledge.

Hedge your investments. Rather then dump 100k at once into SPY (SPX if not using your 401k) or similar. Invest 10k per week/month. Thousands of people way smarter than you and with 20-30 years of experience fail at timing the market. You will not be able to time the market. Hedge into your investments.

Now suddenly the statement showing our savings and CDs is my spouse's favorite part of our portfolio.

Index funds that should probanly recover given a sufficient tine don't cover emergency expenses tomorrow!

Dollar cost averaging is always a solid investment strategy.

Who knows how long oil prices will be falling? In the end it's a pissing contest between Russia, Saudi-Arabia and the US. It may be over tomorrow, it may be over in a year...

But the small amounts is a wise advice.

The h1n1 prior to that was the 1918 one that killed 500M people.

Just because the pandemic ends doesn't mean the value of companies returns - some will have shrunk, some will have failed.

They are panicking and just do whatever they can to make their lizard brains feel better.

I don't trust Trump to handle this situation with any more grace than he has till now so I predict more crash days.

Buckle up. It's going to be a hell of a ride.

I don’t think you can be so sure of this

That being said I do think that some segments won't be the same for a long time - especially the type of superficial travel, where people only go to a place because other people did it and seemed so cool.

I think "instagram travel" will have lost its shine.

At the current growth rate (of confirmed cases) in the US, in about two weeks there will be more cases in the US requiring hospitalisation than there are ICU ventilators in the entire United States.

We need to get that growth rate down, or a decent chunk of the people who are hospitalised and unable to get a ventilator will die.

In China the CFR (crude fatality rate) started at 17% and dropped to 0.7%, check figure 4 here:

https://who.int/docs/default-source/coronaviruse/who-china-j...

I the end it might be that Chinese response will be the most effective model to how to best respond to an epidemic.

E.g. it might be that 20% of cases require hospitalisation. Or it might be that there are ten times as many cases as we thought, and only 2% require hospitalisation.

But the number of people in hospital remains the same in either case, as do predictions for the future strain on the healthcare system (up until the disease infects a significant fraction of the total population).

You are more likely to die in the stampede triggered by a fire in a crowded cinema, than the fire itself.

If 20% of a small number and 2% of a bigger number are the same number of people in hospital, the hospitals will be in the same situation. What is emotion driving? People showing up in emergency? These people will be triaged, and will not take up the most limited resource - ventilators - unless they need them.

I don't think 'panic' will overwhelm anything other than the triage nurses. This is not what you should be worried about.

Take any disease that kills 99% of those that get it. You are going to be a lot more scared of it, than one that kills 0.1% of infected targets. It does not matter if the overall death number is the same.

People will act far less logically in the first case than the second.

This is not about "math" it is about emotional responses and how that affects everything. As I said, you are more likely to be trampled to death than die in the fire that caused the panic.

I don't care about what tugs on people's fears the most. I'm not afraid of their fear, I'm afraid of hospitals being overrun by actual cases.