Wednesday, July 01, 2009

Dollar Cost Averaging - Fama/French Forum

A really good video of Ken French on Dollar Cost Averaging. :

Dollar Cost Averaging - Fama/French Forum:
"Does it make sense to dollar cost average? It depends. Standard financial analysis says dollar cost averaging is suboptimal. If you focus on only your investment outcome, investing a lump sum immediately lets you construct the best portfolio you can today; slowing the process with dollar cost averaging just keeps you in something other than your best portfolio until you are done. Behavioral finance provides a different perspective."

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