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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: Steve Hallam who wrote (4406)4/1/1998 10:51:00 AM
From: Ken Brown  Read Replies (1) of 42834
 
Steve,

>>Are you assuming a lump sum in at the valley of the 12% correction?<<

I don't understand your question. I was trying to say that for a lot of people, DCA can work better than lump summing even in an up market. That goes against common sense, but I was pointing out (as Bob has so often) that people tend to invest emotionally. Therefore, someone lump summing might put in a big chunk of cash near a temporary top, only to get scared and pull out of the market near the bottom of a correction.

Obviously, a lump sum during the valley of a correction will beat DCA, but that's very hard to do (unless you've been listening to and following Bob Brinker).

Ken
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