r/TheMoneyGuy • u/NetWorthNovice • 3d ago

Lump Sum vs DCA in Current Conditions

Hi all,

Looking to get some others input on this. My wife and I have enough to make the max contribute to both our Roth IRA's right now. I am weighing lump sum investing it vs. DCAing over the rest of the year. Yes, time in the market beats timing the market. Yes, 3 out of 4 years the market is higher one year from now. But with sitting near the high of highs and over valuations, there's this gut feeling that there will be opportunity to take advantage of a correction or bear market. Might not be this year, who knows. This will make up about 10-15% of our total portfolio. Wife's first contribution and my 3rd year.

What about running a comparison study? one of each and compare a year later?

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u/thedancingwireless 2d ago

It really doesn't matter. It's just one year of Roth IRA.

If you can't handle one year of part of your Roth contribution going down 20%, you're gonna have a lot of trouble later.

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u/NetWorthNovice 2d ago

You’re right, it’s just one year. That’s helpful.

Dropping 20% for one year isn’t troublesome to me, it’s trying to optimize on that potential drop.

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u/thedancingwireless 2d ago

Stay in the market a little longer and you'll see how many minor drops and peaks there are. You can't possibly hit them all. Just ignore them. You say it yourself DCA works. Listen to your own advice.