Explaning the concept of dollar cost averaging using the concept of gambling is totally out.
The first thing is that the initial investment of $10 may loss its value when the market hit bear run. But when bull run makes a come back, the loss may actually become less loss, break-even or gain depending on how high the market recovered. So much for your initial investment.
The second thing is that no one know when is the right time to invest. Even Warren Buffet, the investment guru, know only one thing - value investment. When the stock is over value, stay out. When it is under value, buy in. And when the market spiral into depression, he will be caught in it unless he got out quick enough. But he know one thing, market always rebound from financial crisis and that's why he only invest a small portion of his personal wealth now. The balance is to take advantage later if the market went down further. Thus, his is practising doing dollar cost averaging in a way.
If you want to earn more, learn more.
Max Ee
· 1 year ago
The writer already made his disclaimer at the 1st paragraph. If you do not remember, please scroll up and read it again.
All Comments
The first thing is that the initial investment of $10 may loss its value when the market hit bear run. But when bull run makes a come back, the loss may actually become less loss, break-even or gain depending on how high the market recovered. So much for your initial investment.
The second thing is that no one know when is the right time to invest. Even Warren Buffet, the investment guru, know only one thing - value investment. When the stock is over value, stay out. When it is under value, buy in. And when the market spiral into depression, he will be caught in it unless he got out quick enough. But he know one thing, market always rebound from financial crisis and that's why he only invest a small portion of his personal wealth now. The balance is to take advantage later if the market went down further. Thus, his is practising doing dollar cost averaging in a way.
If you want to earn more, learn more.