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Why Dollar Cost Averaging on an ETF Makes Absolutely No Sense
By ProButterfly  •  January 9, 2018
by: Tam Ging Wien - Misconception or is there Something More Sinister? Recently I came across a product sold by POSB called Invest-Saver which is a monthly savings plan designed to allow you to invest in ETFs using a dollar cost averaging strategy. They painted the benefit that this product is convenient (auto deduction without needing to open a trading account), affordable (minimum of $100 per month) and a long-term savings using the advantage of dollar cost averaging. I could understand convenient, I could understand affordable. But, this product got me thinking about the last benefit; could you beat the market if you invested an index that actually tracks the market? What’s more, using dollar cost averaging means that I would make my investment purchase at fixed time intervals. Somehow, this seems contradictory to me! How it is possible to beat a market index by investing ......
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By ProButterfly
Tam Ging Wien has been an avid equities and real estate investor for over 10 years. His passion for financial education and training stems from a desire to help others help themselves achieve financial freedom. In 2017 he published his first book entitled REITs to Riches: Everything You Need to Know About Investing Profitably in REITs.
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One response to “Why Dollar Cost Averaging on an ETF Makes Absolutely No Sense”

  1. ANON says:

    Misconception or is there Something More Sinister? <– This describes the author perfectly.

    I usually refrain from commenting but the use CAGR here is absolutely misleading.

    Total Returns will of course be understated if you don't invest all available capital at the initial time frame.

    The real CAGR assuming new capital of $100 is available every month is probably much closer to 6% than the author's poor estimation.

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