1/ After reaching $7 Trillion last week, the US Federal Reserve only added $60 Billion to its balance sheet this week. Only a drop in the ocean at this point...
2/ But still, in 2008 it took 5 years of #QE to add that much money in the system. In 2020 we did it in 2 months...
3/ And yet in percentage term this is only a 67% expansion of the balance sheet. There is plenty of room to do more...
4/ Only one thing to do: keep calm and #StackSats!
Facts about dollar cost averaging:
• How often you DCA doesn’t really matter.
• There is no such thing as a best day to DCA.
• You can lose money with DCA, so choose your asset wisely.
More details 🧵
You can dollar cost average an asset daily, weekly or monthly, over the long run it doesn’t matter.
The only thing that matters is that you are consistent.
Just do it.
You might want to “optimize” your dollar cost averaging strategy by picking the best time to buy.
This is pointless. Pick any day of the week to DCA, that makes virtually no difference over the long run.
Sorry to break it to you, but dollar cost averaging isn’t the ultimate investment strategy.
If you are looking to maximize your return on investment, look elsewhere.
Let's see why and how to improve it.
You all know what dollar cost averaging is. Pick an asset:
- Buy a fixed $ amount of that asset.
- Do that at regular time intervals.
Continue until you are tired of it.
If you started dollar cost averaging the SP500 at $100 per week in 2012 you would now have:
- Deployed $50k.
- For a profit of $27k.
- Or a ROI of 54%.