Topic: What do you think? Lump sum vs DCA best accumulation strategy. (Read 388 times)

Lump sum would really be just that ideal or something possible if you do have the funds or shall we say that you are financially capable. You could really be that versatile which one you would choose.
You could be able to buy on lump sum and you could be able to DCA as you do like or basing up into your own preference and analysis.Whereas, if you are someone whose really that relying into your monthly budget came from your allowance or salary then it would really be that hard on doing that lump sum or on point investment. You could DCA though but it would be situational which we know that it would really be basing whether
its the best time for you to get in or buy or would really be waiting up a little bit more.

Profitability would really be that basing or depending up on how smart or wise you do make your buy and sell strategy not unless if you are a holder then you would definitely be having
no stress whether the price would be going up or down.

im honest that i prefer lump sum at best time, DCA im not really good with it, i just don't like the idea of keep accumulating despite market price is high, i prefer more buying at the dip mainly because i know that the price will definitely get back up so i don't need waste time on DCA, because just imagine if you just lump sum suddenly a week forward price increased 20% you're already in profit with DCA it usually takes time.
DCA is only good for those that don't tolerate massive price swing, just for reminder massive price swing is something normal for those that do lump sum and timed investing so to speak.
if you are at the circumstance where you find a coin is so undervalued and you are so sure that in the future it will hits all time high despite the current fud and massive downturn, you will be comfortable with lump sum.

personally I never DCA, always lump sum, i only do DCA with stock, since with it the time frame usually longer, like basically half a decade waiting just for mediocre increase.
definitely suited for DCA for people with consistent income.

Your right about this lump sum requires more knowledge about bitcoin to be successful than DCA, if an investor buy at the wrong time with lump sum he might remain on a loss for 2 years like those who bought at the last ATH of bitcoin would still be on a loss in their portfolio, but with DCA we have to worry less about market volatility and we can easily accumulate bitcoin without any need to time the market since its a very flexible strategy, its also a cost effective one since you can just chunk down your investment into smaller bits to suit your income.

Yeah, both have their merits and demerits, as you mentioned, and it depends on individual targets, financial goals, and knowledge and experience about the market. And, since we all know that the cryptocurrency market is highly volatile and unpredictable, this makes the DCA method more suitable and viable based on how the market moves in general.

Those who have no knowledge and experience about the market will barely get any benefits from making lumpsum investments because they will barely be able to time the market perfectly or at least well so that they can get good returns on their investments and their investments don't start losing value right after they are done. However, those who have enough knowledge and experience might find this method useful because they know they can time the market pretty well and earn more profit this way.

Once we choose a strategy that fits us the best, we need to be constant on its application, this is the step most would-be investors have a problem with, since they often start out strong but after a few months they get discouraged by how slow the positive results may seem to accumulate.

Not really understanding that in order for DCA or buying with a lump sum at the bottom to show their best performance, they need to give them a few years before their profits become high enough to bring a positive change to their lives.

dca you can save or wait by looking at market conditions, but by putting all your money in at once you don't have a remaining balance that can be used to buy again when the market turns down and turns around.

Yes, DCA and Lump Sum are two great approaches for different investors. I've done both on different occasions, but tend to do DCA due to the small budget I have. There's certainly no harm in choosing between the two based on individual preference, I'm sure both are fine in the long term. DCA is a smart choice for those who don't have a big budget, but it's not bad for those who do. Saylor did DCA and he's consistently done it so far, Nayib Bukele also did it as far as I know.

You cannot time or predict the markets, hence why lump sum is, IMO, not a good strategy if you want to expand your portfolio and make money work for you. You will have on set price to which you will expect it to move away from, and it becomes increasingly hard to see any potential profits to it especially if the market is performing poorly. Whereas in DCA, you get to buy the lows and avoid the highs if you'd like, though it's more time consuming than buying in one single go, you are guaranteed to always make a profit if you know how to read the markets and how to hold off your purchase depending on how the market moves.

The method of buying is not even supposed to generate much argument because there are already enough posts and articles covering the various method of purchasing bitcoin. I'm sure those doing the buying have already chosen the method that is fine for them and are already doing justice to their portfolio. Like I responded to someone before which is also in agreement with the comment of many people here, the important thing is how to manage the portfolio and the ability to stick to plans and hold the investment for long, not yielding to the urge to sell premature especially when the portfolio enters profit.

I think for large companies with tons of liquidity there is more flexibility in adjusting their purchasing strategy. When you look at Micro Strategy's purchases, I don't know if the goal was to accumulate and increase their portfolio through DCA, or whether DCA just was the required means for a higher purpose. In my opinion their main objective was to build a powerful position in the market. They have added BTC all the time, no matter what the price was, whether the sentiment was negative or positive. It's quite impressive and by now they do have a position that is really powerful. They now own close to 200,000 BTC and there's definitely some game theory kicking in here among the biggest players in the industry. If there is a player like Micro Strategy and that player is increasing their portfolio more and more, on the one hand it creates positive momentum and sentiment and also some pressure on other big players to not fall too far behind, and on the other hand it gives Micro Strategy a massive leverage option against players trying to short the market and put downwards pressure on the BTC price. Since BTC is deflationary, Micro Strategy is also soaking up more and more of the circulating supply, making it more scarce at the same time.

i am curious how they will execute their strategy one day, whether they already have an end game in mind or whether they keep buying and observing market developments. It's an exciting but also somewhat crazy strategy because they gain additional leverage when BTC's price increases due to their existing portfolio that is going deeper and deeper into profit, allowing them to leverage existing BTC positions to add new BTC.

So I am not really sure whether Micro Strategy is primarily following a DCA strategy in order to better control for volatility exposure or whether their strategy simply is to keep buying no matter what in order to increase their market power.

But this would really be just that applicable into those investments on which we know that it could really last up for long term or having really that community support and potential and not into those shit projects
on which you do plan to bag hold because even if you do make up that DCA which it would be totally useless if that certain project price or value didnt increase overtime. So it wont really be giving out that advantage
even if you do really be able to accumulate on below prices. We cant really be able to tell on what would gonna happen in the future but at least we do already have that kind of awareness on how things works.
DCA is always been that known to be the best thing to be done on a crashing market specially on a coin which we do know that it could really rise up its price later on.
If you do know on what you are doing then you could really take advantage and make money into this volatile space.

Yeah, there's no reason to be sorry about anything.  Since DCA gave you good results in the past it makes senses to keep using that method.   At the end of the day, we just have to figure out what investment style works best for us. 

Timing is really that relevant when we do speak about money making opportunities on which if we are on a condition or situation on which the market is really at the bottom
then it would really be just that ideal or best way to do such thing on where you could buy on lump sum but of course only on the amount that you can afford to lose and you shouldnt really be
going all in because risks is there and there's no way that we could be able to assure that investing on Bitcoin in crypto would surely bring out that 100% profits.

When it comes to strategy then it would really be that just depending into your own preference whether you would really be deciding on lump sump or DCA. We do have our own
strategy and decisions when it comes to investment. This is why if you do see opportunity then go ahead on doing all in but of course dont get surprised
if your investment turns out to be negative on next second. Expect volatility but if you are going for long term then this wont really be an issue.

When you're earn money from your jobs or business which mostly get paid in fiat, use it to DCA-ing Bitcoin.

When you have a big amount of money, you can use lump sum strategy when you're in the right moment e.g. holding fiat during market crash, holding Bitcoin during bull run. So you can buy at the bottom and buy at the top.

I mean it's called a Lumpsum for a reason, it's not really something suited for accumulation. It can be done every now and then whenever the market is down but it's not going to beat DCA in terms of consistency. I'd only ever do lump sump investments if it was at the start or as I said, when the market is down and you're investing in the market for a long time.

As for DCA, I don't think having a steady flow of income is even a challenge. In the first place, I don't think anyone without a steady flow should even start investing. That, or have a huge lump of sum that can support you for a sizeable amount of time even with DCA taking a chunk out of it every week/month. It's pretty beginner friendly as well and anyone can take it on, even newbies.

Without beating about the bush, the DCA is a very good strategy, it will limit your risk for you, or should I say that it will average it for you on both the miss and the save sides where you might start the investment at a high price even when the asset will still move lower against your position (save), and you might start the investment at a very low price even when you can invest all and will be in your favour (miss). Regardless of the condition, DCA will always help investors to average their investments and will not miss too much which is the main thing here.

But this can make you miss higher gains also, which is why the investment of all your money at once could be good at times. But you will have to understand the market before such can be risked. As a good speculator, one can know the bullish and the bearish times of the market, and one can know when the market has bottomed even if it is still bearish in trend. And with the knowledge of this, you can invest all your money at once if the market is bullish or has hit the bottom.

The choice is yours, and some people observe the two to be better cautious.

Yup, DCA for average person is the best choice. As a person that earns averagely and being a family man, it does makes sense and the eagerness to invest should be there. Because we don't know what we can do and spend on with the money that we have if it's excess. The profitability really differs on what season that investor buys. But if we're talking here about the long term effect of either of the two, it's always been profitable as long as you'll never sell at losses because that's a total waste of time and money. Anyway, some decisions are like that when you have no choice but to sell at losses due to emergencies so don't forget as well about setting up your emergency funds so in times of need, you won't need to sacrifice your holdings.

Since the circumstances of each person are different, it makes sense that each person may have their own reasons to prefer one strategy over the other, since both strategies have their pros and cons.

But for the average investor I think DCA makes more sense, as it only requires to save their money for a few weeks and then they can use it to buy the bitcoin they can afford, buying the dip with a lump sum is more profitable, but this will require from the investor the ability to predict the bottom and to have a lot of money at the time, two conditions that most people cannot really fulfill.

I am in favor of lump sum if someone is able to do that. Actually, it's best to have it through it when the investor has a lot of money but the case is different for all of us. Not everyone is able to buy huge amounts and has a lot of obligations and that's why what's left with their salaries is what they're spending to invest. So if you are an average worker and sometimes you receive bonus, I think that's the time that you should use your money wisely and do a lump sum buy. But you don't stop DCAing because whatever works for you, must work for you. As said by the others, DCA is good during the bear market and there is no doubt with that and that's also the same with lump sum if you happen to buy at one dip part of that bear.

I think the question misses the main point: that the vast majority of people do not have that option. They have limited capital, consisting of a small percentage that they can save from what they earn for their work, which leaves only the DCA as a possible form of investment. Then for those who do have that option, I think the best thing to do is what thecodebear has said: