I keep hearing advice about ‘just DCA and chill’ or ‘buy the dips’ etc. But what if a person is in a situation where they can’t DCA due to not having an income source, international investing restrictions, other personal reasons. Should they still just hold in the market for long term? Or does the lack of new capital change the risk profile?
TLDR: no ability to ever DCA/ buy the dip. Are the markets still a good bet?
Serious question: what happens when you can’t DCA?
byu/CrowTraditional0030 ininvesting
Posted by CrowTraditional0030
4 Comments
“What happens when you have no money but everyone is saying ‘you should save for retirement’?”
The point is to do it if you’re able, not to do the impossible.
The only reason you DCA is that you are buying every time you have extra money. The rule is just buy as soon as you can.
I review struggling people’s finances every day. They all tell me they don’t have 50/week.
I always find 50/week worth of waste in their current spending.
I’m sure there are people who truly can’t run any leaner, but they are not the type to look for a free consult with a paid advisor.
If they’re talking to me, it’s because they know they could and should be doing better.
The first DCA should be to your emergency fund. Something has to divert from just spending every dime you make.
Or find better avenues for income. There is always a way, you have to want it bad enough. Hope that helps.
>‘buy the dips’
Side note: don’t do this. Just invest whatever you can as soon as you can. Waiting for a dip leads to underperformance.
>But what if a person is in a situation where they can’t DCA due to not having an income source, international investing restrictions, other personal reasons.
If you have no new money coming in, you can’t invest new money. When you get income, start investing again.
>Should they still just hold in the market for long term?
Your existing funds? Yes. Your current portfolio has nothing to do with your inability to contribute additional funds.
>Or does the lack of new capital change the risk profile?
No.