Mar

16

One thing that should be mentioned in any discussion of dollar cost averaging is that it really only works if you have an independent source of income to add to the investment kitty. Without that it pretty much devolves into just reinvesting dividends. Reinvesting dividends does work too. Studies have shown that about half of all Triumphal Optimists 100 year long return came from reinvestment of dividends. This incremental return was greater than the average dividend rate. Thus part of the overplus came from the timing effect of dollar cost averaging the dividends.


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