Reply #8: the longterm effect of DCA'ing`

[paulsby]

is that you are buying more shares when shares are cheap, and less when they are expensive. in the long run, you get a very good average price.

even in periods where market performance is flat, you can get a return, since your average cost is not half bad.

it keeps you IN the market when everybody is panicking (dow sub 8k) and keeps you from overextending when there is euphoria (dow 13k+)

iow, it takes EMOTION out of investing

and as a trader, let me tell you - emotion is DEATH for a trader, and not good for an investor either

in poker, we call it 'going on tilt'

i know a trader who blew out a 40k account in ONE DAY doubling down over and over on a losing futures position.

THAT is emotional trading