And does it depend on the market?
1 sat \ 0 replies \ @BitcoinNewsCom 21 May 2022 freebie
https://bitcoinnews.com/dollar-cost-averaging-or-value-averaging-whats-better/
0 sats \ 2 replies \ @itsrealfake 22 May 2022
isn't this just a fancy version of 'buy the dip' ?
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1 sat \ 1 reply \ @random_ OP 22 May 2022
Kind of, not really. It's more like the contraposition.
From what I understand, DCA is buying a fixed amount at a regular interval while DVA is buying up to a fixed amount depending on the portfolio value and a target value. If the portfolio value is greater than the target, one might even sell. The major difference between DCA and DVA is that with DVA you end up spending less $ to reach your target portfolio value if price goes up. Otherwise they are the same.
If you have a hard cap to your portfolio value, DVA should bring the average buy-in price down over time.
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0 sats \ 0 replies \ @itsrealfake 22 May 2022
makes sense... thanks for clarifying
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0 sats \ 1 reply \ @k00b 21 May 2022
I'm kind of just living hand to mouth right now, but DCA was never my style when I was buying.
When I was buying I would do it bulk. Everything I had beyond ~6 months of personal runway.
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0 sats \ 0 replies \ @random_ OP 21 May 2022
I was thinking about it today. If you buy a fixed amount every day, then the rate at which your capital investment increases is 1/x where x is the number of days. (Ex. your DCA purchase on day 100 represents 1% of total capital invested whether you buy $10/day or $1/day).
However, your portfolio value does not follow this same curve. It fluctuates with price. So maybe your DCA investment on day 100 represents >1% of your portfolio value if the price is down.
I think you can quantify how good a purchase is at any given time using the relative difference between these two percentages.
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