A quick question for all you financial wizards out there:
The best long-term approach to investing seems to be dollar-cost-averaging into a diversified set of index funds. Is there a way to do this without paying a commission through your broker every time you make a purchase? For example, if I have an account through TD Ameritrade and want to put $100 a month into Fidelity's Total Market Fund, is there a way to do this without paying the $9.95 commission every month?
Thanks.
Most mutual funds have no transaction costs if you buy them directly from the mutual fund company.
If you like Fidelity's total market fund, set up the account there and you will have no charges to buy their fund each month.
Like the previous two folks said, buy directly from Fidelity. www.fidelity.com. No charges.
dollar cost averaging is good if you think the market is going down...
its more of a timing game and well when you look at total return of portfolios less than like 5% is usually attributed to market timing.
I've been told that is like shitting in the bed and pushing it out with your feet.
I don't think you know what dollar cost averaging is, because it is the opposite of trying to time the market.
If you are lucky 5% of your portfolio return will be attributable to market timing. More likely -30% will be.
I don't think you know what dollar cost averaging is.
Look it up please
look here is the deal in general terms the market goes up over time correct? You know go look at a chart...
if you were to buy every two months for 5 years the chances are your cost average would end up being higher than what you orginally paid.
here is a decent good vs. bad
http://www.investopedia.com/articles/stocks/07/dca-fight.asp
The general consensus is that asset allocation explains over 90% of returns.
while your right that most people don't consider DCA to be market timing...I don't really agree especially depending on how you do the DCA.
DCA will not necessarily provide the highest return in every situation, but it tends to minimize large swings in a portfolio due to spreading out purchases to reduce market volatility. Another similar method, value dollar cost averaging was shown to produce a higher yield when considered over the long-term. The method requires more involvement from the investor, but is still centered around making purchases of funds at regular intervals.
That's a stupid article. It essentially compares investing $50,000 in a lump sum versus dollar cost averaging over a period of time. This is not why most people do dollar cost averaging. They DCA because they don't have a lump sum of $50,000 to invest, but they will have a small amount to invest every month. That small amount is best put into an account for investment over the long term.
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