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.
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.
reply