From Jeffrey Saut's most recent Minyanville article:
...if an investor began buying one dollar's worth of the SPX at the end of September 2007, and continued to purchase one dollar's worth of the SPX at the end of each month until year-end 2010, the dollar-cost averaged performance is about 15.4% (excluding commissions) over that 40-month period.
Saut then points out that those who did not dollar-cost average had a roughly 18% loss...
That's a whopping 33% out-performance if our fictional investor had been able to conquer their fear and had employed a dollar-cost averaging strategy. Regrettably, there's the "rub."
Ladies and gentlemen, while it's true over the long term that it's all about earnings, in the short to intermediate term the stock market is fear, hope, and greed only loosely connected to the business cycle.
Well said, Mr. Saut.
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