TITLE

The Fallacy of Dollar Cost Averaging

AUTHOR(S)
Thorley, Steven
PUB. DATE
September 1994
SOURCE
Financial Practice & Education;Fall/Winter94, Vol. 4 Issue 2, p138
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Explains the logical fallacy of Dollar Cost Averaging (DCA), the practice of making equal dollar investments over time in a stock or mutual fund. Mistake in using average cost and average price as performance measures; Analysis of the strategy in terms of expected return and risk; Numerical illustration of three investment strategies; Nonrandom price changes.
ACCESSION #
9607255770

 

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