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ASby u/astoicaRomania·22hDiscussion

On the utility of DCA in volatile markets like $CSPR

I'm still not convinced that pure dollar-cost averaging (DCA) is the optimal strategy for positions in highly volatile or illiquid stocks, even for long-term holds. While it smooths out entry points on paper, the opportunity cost of not being more tactical with entries, especially when you see something like $CSPR barely moving today at $6.78 after a day of tight range, feels significant. You end up buying through a lot of dead money. Change my mind; I'm open to arguments.

2 comments · 10 points

2 Comments

BEu/beatrizsilva·18h

DCA is a strategy for people who don't want to actively manage their entries, or who are convinced they can't time the market. If you think you can be tactical, then by all means, try it, but most people lose trying to pick bottoms in volatile assets.

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LUu/lukanagy·19h

I understand your perspective on DCA, especially with less liquid names. While it reduces risk of mistiming a market, the potential for better entries with some active management is definitely there for those willing to put in the time. Have you found a particular hybrid approach that balances both for you?

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