DCA or invest Heavily? This is the moment, once in a few times of your life that many is waiting for?
DCA or Dollar Cost Averaging is usually use for ETF or Funds. This technique is good for average and most people. This technique is also used by funds house as they cannot buy too much or see too much.
I had taught a friend this technique after 2008 Lehman Brothers and many of my clients had benefit from DCA.
However I also taught my friend an advantage technique which she details in this blog https://rainbowwealth.blogspot.com/2021/12/rainbowwealth.html . I will share the essential here.
Most people do not have time or do not know how to read the technical charts. Thus is unable to read when is the best time to buy the stocks near bottom. I taught my friend this easy strategy.
1. If you have $200 to invest each month. Save $100 in a bank account you don't touch and invest $100 in an ETF or Fund like S&P500 $SPDR S&P 500 ETF Trust(SPY)$ which annualised has 10% return. This is DCA.
2. However to really grab the max return. When the market is falling or down trend. Only invest the other pot of money save to buy when you heard the market crashes. This is called invest heavily.
3. Do you invest heavily once. NO! [Anger] I usually divided to 3 parts 25% 25% 50%.
4.First 25% I will invest if the funds or ETF break more than 5%, in case the market rebound I have invest 25%. If the fund fall 10% to 15%, I will invest the next 25%. The last 50% I will only invest when the market dropped at least 30 percent. [Tongue]
5. After that it will be back to DCA and 100 to bank. I seldom do DCA on stocks unless it is a good stock. [OK] [Bless]
6. My friend has also successfully implemented it on CPF OA. [Call]
7. If you are really into investing, you need to educate yourself in technicals or at least copy trade. You can visit moneymagnetcreator.com to learn from this forex trading platform. They have real institutions traders that teach you how to trade, or copy trade and also they have Islamic friendly account.
Happy trading and investing
[Disclaimer: Do not trust everything is written here, must always conduct due diligence, i have many friends who are very fact actions taker but do not do research and always get in at wrong time, if you have strong psychology and know the know why, is good. Else if you use your extra credit it is no good and sad if you lost money]
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