Dollar Cost Averaging The S&P 500 Is Always A Great Strategy, but…

Dollar expense averaging the S&P 500 is constantly a terrific method but you need to know a few things you MUST adhere to in time. Without that, you'll simply wind up washed away like every other typical financier.

0:00 Dollar Expense Averaging
1:21 Secret Factors
1:41 Example
4:46 Results

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The S&P 500 Is Always A Great Strategy, but…

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42 Comments

  1. WARNING: As the channel grows (thank you all for that), there are more and more scammers impersonating me. The only thing I am selling is my Research Platform and Book ​​https://sven-carlin-research-platform.teachable.com/p/stock-market-research-platform
    All that I do, the real links to my content are in the description of the video, I don’t give out my Whatsapp number and I don’t sell any Cryptocurrency related things! BE CAREFUL OUT THERE!

  2. Great video Sven!! Btw love your book!! It’s one of my favourites on investing, greatly appreciate all your work!!

  3. I practice something like DCA. I call it FOMO therapy. When you feel like you have to chase something down or up, just buy a little bit until FOMO builds up again.

  4. Good information as usual. When I started investing I was dollar cost averaging in the S&P 500 for many years occasionally buying into specific companies on the side when great opportunities emerged

  5. Dollar cost Averaging is really hard to do. I tend to get that Fear of Missing Out. Thanks for your channel and book.

  6. Thank you for this encouragement. I’m still new investor and that’s exactly What I’m doing especially when the blood is my own .

    1. happy to hear that! The key is sticking to it for 30 years where 27 might look ugly!

  7. There are studies out there claiming that the retail investor averages a return of only 2% or 3% due to losses from hype stock investments, fear during crashes, and trying to time the market. So DCAing into the S&P is probably the best strategy for most including myself when I look back at my own mistakes over the past 10 years.

    1. that is about it:=-) 7% year over year leads to something in the long-term

  8. I stopped DCA’ing into the S&P 500 when I saw stocks like TSLA going to the moon. I wanted to avoid buying into that craziness, since I am getting closer to retirement.

  9. 6:21 The S&P 500 PE shows that it hit 123.73 in May 2009 which ended up being an excellent time to buy, so a high PE doesn’t always mean a bad price.

    1. better look at the CAPE then, that was high because of low earnings, not because of high prices

  10. Great video! Just a question.
    From a tax efficiency perspective, how often do you turn over your companies on average? Roughly speaking.
    Because that’s an advantage of index investing

  11. I would only add that a ‘FTSE A.W.’ or ‘MSCI ACWI’ ETF is probably the better option for the know-nothing investor. With the S&P500 they still pick one (currently expensive) sector.

  12. Thanks for this insightful video.
    One comment : on the example we are talking about on a return of 25% more less in 12 years. So, around 2% annual – including dividends. So, more less we were above average target inflation. Next decade is expected 4% annual inflation. So, this strategy won’t return good real value ahead. Any thoughts about it?

  13. A related question: What do you think about dollar cost averaging into a Covered Call ETF on an index with lower volatility than the S&P 500 (e.g. the Russell 2000) with a focus on income generation? This may be less tax efficient, but should lead to more stable returns (and potentially higher average returns by benefitting from the options premium).

    1. I really don’t know about it, there is normal investing related to owning businesses and then there is complicating things which is not for me!

    2. Covered call ETFs would be best in a sideways market. If the market is on its way up and a reasonably good rate then you lose the upside gains…. The sideways market allows the income production when price gains are lacking, but won’t out compete a solid bull run. Personally I have a covered call utility ETF in place of bonds. Zwu in Canada. 7% on very stable equities like telecoms and electric companies

  14. Hi Sven I’m new to all of this value investing stuff but I’ve been looking around and found “TRIG” and for a renewable energy company the valution is on the first look quite low, but I’m not sure if I am missing something out in regard to how the company operates. Could you make a video about it?

    Thanks for all the good information and content you produce. 👍🏻

  15. Nice Sven. I also tell buy index to all my family and friends and others who ask me what to buy, but they dont want to dig down into reading. But the onely demand i have is if they decide to do this you are in it for the long haul:)

  16. Mr. Sven, I know that you are not into ETFs and Index Funds, and also that you give not advice. However, I would like to ask you if the DCA strategy could be applied to a Total World ETF (like VT) instead of the SP500?

  17. I was finally about to buy your course but as investor with a couple thousand in the market it doesn’t make sense for me to pay 500$ per year. can you make a monthly plan if I want to dedicate only 1 month a year? alternatively maybe a lower tier? I am willing to pay 200$ even knowing I won’t get the full course… I’m probably not the only one on the fence and would love your feedback on this

    1. thanks for suggesting, I’ll have to do something as there are many requests:-)

  18. Yes. Most people should dollar cost average into the US SP500. Personally the US total stock, vanguard VTI, is better as it gets the smaller companies. Dollar cost averaging can be extremely easy as a fixed sum can be purchased directly from your deposited pay check.

    For those who speak calculus, monthly purchases help because they help approximate the curve!

    If you want to do better, keep watching Sven!

    1. I don’t know about those small companies, looking at these small caps and there is a lot of ……

  19. Sven, can you explain the very first graph a bit more? How can the average price go upwards at the points where the last buy was lower than the buy before it?

    1. good point – that is just an approximation of the investment likely! not precise

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