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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Jeffrey D who wrote (8049)	9/20/1998 12:33:00 PM
From: Skeeter Bug	Respond to of 42834

jd, this guy assumes an up market. while ez to see in the rear view mirror, it is a lot more difficult to predict in the future. btw, bob's dca for 1998 (so far) would also be a loser compared to a lump sum. good luck...

To: Jeffrey D who wrote (8049)	9/20/1998 1:37:00 PM
From: Alan Bell	Respond to of 42834

Much of Bob's advice is targeted toward the casual investor, - ie. the person who doesn't follow the market closely, doesn't spend much time on financial matters, doesn't read SI, and wants simple rules to follow. A real challenge that Bob has in providing his advice is making these new investor feel comfortable investing. Over the variety of conditions of the market for long term investing, it is really unclear whether DCA is a win or just a wash. (I suspect over the long haul it would come out as a statistical wash.) But from the psychology of investing perspective, it is real important. For many of the new, and casual investors that Bob speaks to, the DCA rule makes a lot of sense. If someone had started investing at Dow 9500 with a lump sum, they most likely would be out of the market now, never to get back in. If they had been DCAing, they would have only be down a small part of their money and wouldn't be too discouraged. Bob talked about this aspect of DCA in answer to a question several months ago. -- Alan