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    Dollar Cost Averaging Is A BAD Investing Strategy. Do THIS Instead



    Dollar Cost Averaging is a very popular investing strategy, but a lot of people get it very wrong.

    Unfortunately in the case of intentional Dollar Cost Averaging, the investor will on average lose money compared to investing in one go.

    And in this video I explain exactly why DCA is not a great investing strategy.

    But there IS a good version of Dollar Cost Averaging – the problem is that it is the unintentional version.

    And not only is that way of investing good, but it also gives you a way of improving your investing strategy further by being smart with the stocks you choose – I share a specific tip on how this way of Dollar Cost Averaging can work.

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    View 44 Comments

    44 Comments

    2. Doublewestern on

      So in conclusion. YOLO is the right strategy as long as it's a right investment vehicle. If it the wrong investment vehicle even DCA can't save you. And of course the additional transaction fee from DCA

    3. Elon Tusk on

      I agree with a lot you say but I think it’s important to remember that investing isn’t a one size fits all approach. I literally invest like a retard when I drop lump sums and if it’s a super long investment, why does it matter? I’m not cashing out for 20 years anyway?

    4. InspirationNation on

      Is there any possibility of stocks becoming so high priced one day that when you go to sell, you can’t because theres nobody on the other side to purchase the stock?

      I ask because I see this with the real estate market. If real estate and stocks are expected to outperform inflation over a decades long period while wages havent kept up with inflation for 40 years what’ll happen in the future?

    9. Stephen Kowalski on

      Good point. If you are just investing in the market then DCA is the best. If you have a batch of stocks buying individual stocks you follow for years and know what you are doing you can rotate between all the stocks and get better returns.

    16. Nicholas Young on

      I saw the 5 biggest mistakes video. Strengthens my comment buying the better stocks in the S,&P then investing in an S&,P fund will give you a higher rate of return whether your a genius or not. Better to invest well, then smart sometimes.

    18. MICEVVV on

      In my humble opinion, I think in DCA there is no white or black , the best version is the grey version when you mix lump sum with dollar cost averaging. Let me explain: you can lump sum every determined consistent period of investing, that way you dollar cost average but you don't spread your money you just throw in what you have right now, as Sasha said. So the two terms are intertwined together and are easy to mix for what they really mean. Just put every period what you have and watch Netflix. Great video.

    19. WJ Chen on

      The problem w most ppl is their mind can't last that long, so DCA helps to remove the emotion part of human beings whether it goes up or down, doesn't matter. Cause u r in the game for a longer period

    20. Dak Dur on

      I want to know what happens when it comes to paying taxes, I want to only sell what I bought 2 years ago, not my most recent purchase of 2 weeks ago

    21. Don TEE on

      I can guarantee you that this guy is spitting absolute BS. Don't ever do lump sum investment. Even Warren Buffet uses DCA. The market spends more time in a correction and consolidation phase than in an uptrend. Simply look for a good project or stock and spend a minimum of $1 per day over the course of a year. Take profit during the few days or weeks that the asset pumps, then wait for the inevitable downward correction and reinvest again or simply spend your profit on your lifestyle if you so desire. DCA is absolutely the best and safest way to invest in the market. Don't chase a pump because every pump is followed by an inevitable correction that will last days or weeks or months.

    22. Don TEE on

      A lot of contradictory statements here. He talked about not timing the market then pitched how he times the market. The title is also a clickbait.

    25. anonim091 174 on

      i don't agree, because DCA benefits only if the market grows overtime. DCA has no advantage of buying the dip, it's simply trying to take advantage of the market fluctuation whether it goes up or down. and trying to sell some time later when the market crazily going up that usually caused by hype..

    28. Kamil Sobolewski on

      I also think a quite good strategy if you are new to investing and want to invest a lot at once (If you got some spare money saved up) is to do it over some period with smaller amounts each time for example you invest 40% in the first week or month up to you and then invest another 20% next period also implementing the info from the video to invest into some of the stocks you are looking at that are down at the moment could result in good gains. This is mainly for stocks if you are investing into a index fund such as the popular S&P 500 you should probably invest all your money at once as indexes are less volitile and there is less risk associated but just investing into index funds usually results in smaller % returns per year.

    30. KEVIN AGUILLON on

      Tell that to those who recently bought Nasdaq in ATH all in one shot recently just because “mathematically” market goes up. DCA is not meant to maximize your gains, but to minimize risk. DCA works well when market is overvalued, and yes, in the long term market will go up, but you never want to buy all in one shot in a overvalued market.

    33. brett clark on

      As a statistician, Sasha is spot on with this video. The market generally increases; 100 years have proven this. Two basic cases; 1. If the market increases as per normal, DCA will net you less than investing the total at time 0. (If you are happy to wear this and lower the risk then go for it, BUT, you are implicity betting the market will go lower. So it's contrarian) . 2. The market declines over each future buying interval. This has you "averaging down"..one of the worst mistakes you can make. It's where the statement "paying good money after bad" originated.

      What I will add here is the best things to do is 1. Pyramid (averaging up) for profits and 2. Use stop losses. Over 15 years in the market through multiple crashes has performed brilliantly.

    37. Zane Jones on

      This video is a bit misleading. Other YouTubers show actual numbers about DCA vs LUMP SUM and while Lump Sum makes you more over the long term such as 20 years, it’s not even by much. Lump sum comes with the risk of the market going bear and you having to wait months or years to be back profitable. Yes markets tend to always be in a positive trend but it would suck to see your money be down for 6-8 months at a time or even years so the lump sum can be bad if you’re ever in a financial situation where you now need to sell. Lump sum is only better if you have so much money saved and so much income that if your 20k or 5k was down for a year or more, it doesn’t matter because you don’t need to touch it and can let it ride out theoretically for 10 years if need be. That’s not the case for most people. So if you want the option to be able to reduce risk exponentially and take money when need be, DCA is best because you still come out profitable and you wouldn’t have to wait long stents of time to be profitable as you would if you Lump Sum money and ended up needing it.

    38. Jay Kim on

      What happens on ‘average’ in the market does not matter for the individual investor. The individual investor only gets to experience one version of what happens in the market. They dont get to experience all the things that happen in the market and get an average outcome of those events. You either win or you lose. Simple as that. DCA works especially well in volatile market such as crypto and especially more so during a bearish market where you dollar cost average down because the upside is much greater.

    40. Syed Mohammad Iqbal Al-Qudsi on

      Well, Warren Buffet said to do DCA a stocks especially when they're in a dip to get higher return.

      Let's say VOO
      If I bought it last month, I'll be buying them at $439 lump sum. I would have lost a lot by mid of last month.

      Whereas, what I did, is bought some (fractional shares) as the it went down and manage to buy them using (support and resistance method) at $384.

      Now I'm making atleast profit of $1.68 for said stocks where as the stock which I bought at the peak ($439) has a lost of $1.60.

      Using this example, I'm at profit $0.08 which is quite low but nonetheless still at profit.

      My current portfolio on etoro, has a profit of $1.04. if I purchased it lump sum, it would be around loss of $5.

      My best strategy is to DCA the budget on a weekly basis. Best for me as I might be able to buy em on a cheaper price

    43. Herns Mil on

      I DCA on SPY everytime the price falls and create support, i buy. Another way to do DCA , buy If the price falls on major moving average.

    44. Miguel Quazar on

      If you are concentrating on just investing in crypto (BTC mainly). DCA is a pretty bad strategy. Because BTC always experiences a large decrease in price at some point. Hoarding and waiting to go all in just makes more sense. Even if you don't catch it at rock bottom.

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