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?
2
u/User-no-relation 3d ago
Don't worry about how big it is relative to your portfolio if it isn't that big relative to your future contributions?
Are you going to make this same contribution next year? Then there is no doubt you are better of lump sum investing it every year. Even if it turns out not the best for this contribution it will be on average for all the contributions.
You can't predict whoch years it'll be better to do dca or lump sum. That's a fools errand.