DCA strategy during bear market

[msflyer]

Seek advice / opinion. Have meangingful lump sum. My conviction: S&P 500 will enter bear market in 2022. My strategy: start DCA into IWDA once S&P 500 falls 20% from high.

Q1: How long (months) to spread lump sum for DCA? Note the DCA starts only after S&P 500 falls 20%.

Q2: Simple DCA or enhanced DCA? If enhanced, what rule do you recommend?

 

[Mephist0pheLes]

If it dosnt fall 20% from high? Keep ur money in bank?

 

[ctan84]

Seek advice / opinion. Have meangingful lump sum. My conviction: S&P 500 will enter bear market in 2022. My strategy: start DCA into IWDA once S&P 500 falls 20% from high.

Q1: How long (months) to spread lump sum for DCA? Note the DCA starts only after S&P 500 falls 20%.

Q2: Simple DCA or enhanced DCA? If enhanced, what rule do you recommend?

At least a 20% fall for S&P ? What weed you smoking? I also want some to destress.

 

[msflyer]

At least a 20% fall for S&P ? What weed you smoking? I also want some to destress

S&P500 high was 4818 in Jan. 20% fall will be 3854, which is not far from Friday's 4123 close. In fact, 20% decline occurs once every few years, the definition of bear market.

You don't need weed to know this. Just need some basic investing knowledge.

https://www.investopedia.com/terms/b/bearmarket.asp

 

[ctan84]

S&P500 high was 4818 in Jan. 20% fall will be 3854, which is not far from Friday's 4123 close. In fact, 20% decline occurs once every few years, the definition of bear market.

You don't need weed to know this. Just need some basic investing knowledge.

https://www.investopedia.com/terms/b/bearmarket.asp

CHEYYYY 20% fall from peak lah.... thought u meant 20% fall from Friday's closing.

 

[msflyer]

If it dosnt fall 20% from high? Keep ur money in bank?

DBS Multiplier, SSB, short duration bond fund, some allocation to China equities, and yes the rest in vanilla bank deposits.

 

[Mephist0pheLes]

DBS Multiplier, SSB, short duration bond fund, some allocation to China equities, and yes the rest in vanilla bank deposits.

I myself am accumulating. But i didnt set such a stringent requirement. I already loaded some at current range -10 to -15%

Going to double the amount of investment when it is -15 to -20%. And 5x when it is more than 20% decline

 

[limster]

when going down, I buy each time it drops 5%.

 

[sohguanh]

when going down, I buy each time it drops 5%.

Sorry but isn't 4000 not auspicious? It should be 8000?

 

[reddevil0728]

Sorry but isn't 4000 not auspicious? It should be 8000?

why must be auspicious???

 

[Shiny Things]

Seek advice / opinion. Have meangingful lump sum. My conviction: S&P 500 will enter bear market in 2022. My strategy: start DCA into IWDA once S&P 500 falls 20% from high.

Q1: How long (months) to spread lump sum for DCA? Note the DCA starts only after S&P 500 falls 20%.

Q2: Simple DCA or enhanced DCA? If enhanced, what rule do you recommend?

I‘d start now, because you’re going to feel a bit dumb if S&P doesn’t drop to your “down 20%” level and you end up having to buy higher than you’re at now.

Anyway, spreading it over 6-12 months is a good rule of thumb for entering the market. I think a simple dollar-cost-average over a period of months is best, because that way you don’t need to pay attention to every tick and twitch up or down in the market.

 

[iduncheckmail]

I‘d start now, because you’re going to feel a bit dumb if S&P doesn’t drop to your “down 20%” level and you end up having to buy higher than you’re at now.

Anyway, spreading it over 6-12 months is a good rule of thumb for entering the market. I think a simple dollar-cost-average over a period of months is best, because that way you don’t need to pay attention to every tick and twitch up or down in the market.

Based on your logic then if s&p recover/flatlines for the next 12mths. And crashes thereafter .
Then you also won’t feel dumb meh ?

 

[reddevil0728]

Based on your logic then if s&p recover/flatlines for the next 12mths. And crashes thereafter .
Then you also won’t feel dumb meh ?

The point is can’t be predicted right?

 

[iduncheckmail]

The point is can’t be predicted right?

You can’t predict when, but you can predict will fall.
thats the whole point for TS to place a specific fall % target isn’t it .

 

[reddevil0728]

You can’t predict when, but you can predict will fall.
thats the whole point for TS to place a specific fall % target isn’t it .

How can you predict will fall?

like that you can also predict will rise what

 

[iduncheckmail]

How can you predict will fall?

like that you can also predict will rise what

Omg omg omg .
every few years there will be correction , every 10+years will hav a crash.
im not Nostradamus , it’s a well known fact, TS knows this that’s why started this thread.
Predicting will rise is inherent , if you buy low you have to wait to rise then sell what.
geeezzzzz. Ok enuff explaining .

 

[reddevil0728]

Omg omg omg .
every few years there will be correction , every 10+years will hav a crash.
im not Nostradamus , it’s a well known fact, TS knows this that’s why started this thread.
Predicting will rise is inherent , if you buy low you have to wait to rise then sell what.
geeezzzzz. Ok enuff explaining .

Actually you haven't explained much.

You can't be sure it will drop further. that's the point.

 

[Shiny Things]

You can’t predict when, but you can predict will fall.
thats the whole point for TS to place a specific fall % target isn’t it .

The threadstarter doesn't, and can't, know for sure that SPX will drop as far as 3800. They're hoping it will.

 

[msflyer]

Both Shiny Things and iduncheckemail have merit w.r.t theirs views on market direction. For iduncheckemail, he has merit because market enters bear on average every 5 years or so. For Shiny Things, also have merit because example 2009 to 2020 bull market for 11 years. If one just sat on sidelines after 5 years, one would miss 6 years of bull run.

So, lets respect one another's view.

However, my personal conviction is that there will be a bear market this year. Based on technicals. Given this ASSUMPTION, question is how to DCA?

Shiny Things and limster has given suggestions, so thank you! iduncheckemail, any suggestion?

 

[reddevil0728]

Both Shiny Things and iduncheckemail have merit w.r.t theirs views on market direction. For iduncheckemail, he has merit because market enters bear on average every 5 years or so. For Shiny Things, also have merit because example 2009 to 2020 bull market for 11 years. If one just sat on sidelines after 5 years, one would miss 6 years of bull run.

So, lets respect one another's view.

However, my personal conviction is that there will be a bear market this year. Based on technicals. Given this ASSUMPTION, question is how to DCA?

Shiny Things and limster has given suggestions, so thank you! iduncheckemail, any suggestion?

I don’t think their views are equivalent.

iduncheckemail seems to suggest with certainty, while Shiny Things just say you can’t be for sure.

it’s a different matter altogether if you are talking about going up or down, which isn’t the crux of the issue.

it’s not always respecting one another for the sake of it.