don't be me wrong.... I support DCA.

and yes... no one can time the market.... but we can know the market trend slightly...

I mean 2018.... when the street starting to ask about recession... econ down.....

that's the time you have to stop most of the investment but going for safe investment.

I agree too ! That's why it's healthy to have a ratio of bond funds . It's mostly for people who cant take the fluctuations of the markets and to prevent people from buying high and selling low.

Just to summarize, is the following method a better way to perform dollar cost averaging (DCA), in general for any unit trusts?

1) Downtrend in NAV is anticipated over the next few months.
- Completely stop DCA. Deploy the fund (meant for DCA) for e-fixed deposit, or in money market.


2) Downtrend severity in NAV starts to reduce (NAV price curve starts to reduce and gradually flattens), with the possibility of NAV rebound within the next month (economy may start to be better)
- Perform DCA with partial fund.


3) NAV starts to rebound, with uptrend in NAV expected within the next few months.
- Perform DCA, with full intended fund every month.


Is my understanding correct, about the proper way to perform DCA? Appreciate a few tips, from FundSuperMart expert inventors here.

This post has been edited by kart: Dec 29 2018, 08:01 PM

Those 'anticipation, expectation and possibility' sounds a lot like timing the market instead of DCA Ultimately I think it depends if those possibility comes true or not.

besiegetank

Judging from the opinion of howszat and jorgsacul, it is inappropriate to perform DCA in the severe market downtrend, and they suggest to stop DCA.

Probably, they think that after the end of market downtrend, the total investment value has significantly shrunk.

That is why I am asking howszat the proper way to perform DCA.

It is difficult to predict the market, while your understanding is correct, it is just theory. If one can predict how the market will go in the next few months, one can be filthy rich.

Exaclty, but when can you tell the end of the market downtrend

If based on lessons from the past, it's not timing but ultimately the time in the market that matters.

The DCA way is "regular" and "fixed-amount", by DCA definition.

The point I was making was you should not do DCA in isolation, believing it will work out to be profitable in the end. Because it depends.

You also need to question whether the fund you are DCA'ing is the right one to continue investing in.

Because there are profitable, no-so-profitable, and NOT-profitable funds. So, in addition to DCA, you must also review whether the fund is the correct one for you, and switch if not.

DCA is simple. Put in fixed amount of money every month regardless market is cheap or expensive.

Actually both helps.
Time in the market and timing the market can do wonders.

wow looks who's back

so, what's your take on 2019? is the bear really come for real? Dow touched 22k. but bounced. even from 26k point....

Bears aren't coming yet.

Watch March 1st., and sometime in March,...

1) Trade War decision by Trump.
2) Brexit.

Exactly, if you feel the market is cheaper than usual, increase your normal allotment so in a way you can 'time' the market !

What US funds (or funds which invest substantially in US market) which I can consider in the next few months?

10% correction
20% bear
30% crash

Theoretically, those are the numbers to watch out.

Anyhow, afaik the big event happening in 2019 are in march..

DJI have been up trending for almost 10 years.. what goes up, must come down.. so be prepare..

So what did you do in the end? Stay the same, withdraw?

I'm in the same boat as you, am wondering what I should do now. At this rate I'm quite tempted to just pull out and put my money in ASM3, at least government backed and guarantee 6% every year.

Look through all the funds that you have now, you have to review them periodically. Take the pain in cutting losses by selling them all off and reinvesting them in another fund if you find that there is no more chance of rebounding. How to evaluate?

1. Look at their fund size. If fund size is decreasing every month, fund manager wont have cash to capitalize on this correction, your rebound will be slow or worse not moving.

2. Look at past performance of this fund during previous corrections or market downturn.

1. if you do this, you are timing the market, which is essentially 100% opposite of DCA. If you can know the market movements, you don't need to do DCA.

2. and 3. not sure how to answer but see below

The main purpose of DCA is to invest a fixed amount at regular intervals, so investor don't have to time the market as this could result in heavy losses or very high profit but this comes with higher risk. So if you've decided to do DCA, you just get ready your funds, and do it with discipline (e.g. RM500 every month for 3 years). I'd say 3 years is minimum.

And next is fund selection. Never go for new funds, because we do not know how they perform, whether the market will like this fund etc. A lot of new funds go dead because lack of funds so in the end if you do DCA in such funds, you'll be stucked. Instead, go for master funds. Every fund house will have 4-5 master funds e.g. balanced, growth, income, small cap etc. Look at their performance and see which suits your risk appetite and investing profile.

If you want to be more aggressive, you can incorporate an additional strategy say every 5% drop in unit price then you invest another block of RM500 in it.

True true.