[lordentropy]

If stock market always goes up in the long run, I bet you can mathematically prove that just investing all your money as soon as you have it beats any dollar cost averaging where you just invest a small amount in frequent intervals (and keep some of your money in cash).

[StopTheWorld]

> If stock market always goes up in the long run

The DJIA was 381.17 on September 3rd, 1929. It then went down and did not return to that level until over 25 years later - November 23rd, 1954. Factoring in inflation it would be losing money over a period of 25 years.

The DJIA was 1,051.70 on January 11th, 1973. It then went down during a period of enormous inflation, until it hit that level again on November 3rd, 1982.

We can look at the dot-com collapse in 2000, followed by the sub-prime collapse in 2008, which really roiled the economy, followed by the more recent period of stocks sinking last summer, inflation, FAANG layoffs, relatively tight VC money etc.

As Keynes said, in the long run we're all dead. You can put your money in the market and be underwater for over 9 years, or even over 25 years. Of course, on the other hand you can be completely out and miss out during one of the go-go periods.

[throw0101b]

> You can put your money in the market and be underwater for over 9 years, or even over 25 years.

And in many cases, if you didn't cash out and crystallize your losses, you could still be fine:

* https://awealthofcommonsense.com/2014/02/worlds-worst-market...

Also why diversification and asset allocation is important: having 20% in bonds in addition to being in the S&P 500 during the 2000s (post-dotcom, post-GFC) still allowed you to have an positive return:

* https://www.forbes.com/sites/advisor/2010/09/13/its-not-real...

Some Bogleheads did a similar analysis for 1980s Japan bubble: having some bonds and foreign (non-JP) stocks, limiting your JP equities to (say) <60%, and rebalancing ~annually gave you really good numbers, even after the crash.

[upon_drumhead]

The article's conclusion actually specifically calls out that

> This is because when one decides to follow DCA is implicitly expecting that the market to fall in the recent future. However, our experience - at least as far S&P 500 is concerned - tells us that this is not what happens.

Which is basically saying that the S&P 500 always goes up in the long run.