Accession Number:

AD1022278

Title:

The LSI or DCA Decision: Investing Strategies for the Lump-Sum Averse

Descriptive Note:

Conference Paper

Corporate Author:

Air Force Academy Air Force Academy United States

Report Date:

2013-04-11

Pagination or Media Count:

19.0

Abstract:

A recent study finds that a lump-sum investing LSI strategy outperforms a dollar-cost averaging DCA strategy approximately two-thirds of the time between January 1927 and December 2011 using multiple DCA periods and adjusting for risk. This study extends these findings by examining other risk adjustment measures as well as analyzing shorter DCA periods and timing considerations. Focusing on the US stock market for the past 20 years, the LSI strategy does not dominate DCA as strongly as the prior results indicate. Instead, the decision is sensitive to the DCA duration, the timing of strategy implementation and the risk-adjustment method considered.

Subject Categories:

  • Economics and Cost Analysis

Distribution Statement:

APPROVED FOR PUBLIC RELEASE