There are plenty of investing rules and strategies that everyone seems to follow. And we’re not talking about silly ideas like “Sell In May and Go Away,” but actual concepts in portfolio construction.
Ideas on diversification, the 4% withdrawal rule, and similar have become common in almost everyone’s portfolio. And for the most part, these sorts of portfolio ideas are just taking as gospel by the investing public.
One of the most common is dollar-cost averaging.
The idea of placing regular dollar amounts into the markets is what retail investing is built on. And for years, the strategy has been a major talking point for market pundits and bloggers: by investing on a regular schedule, you’ll be wealthy over time.
Well, it turns out dollar-cost averaging may not be the best thing. And investors could be leaving plenty of dollars on the table. In the end, some situations could call for more immediate investment rather than a periodic schedule.