A Note on the Suboptimality of Dollar-Cost Averaging as an Investment Policy

B-Tier
Journal: Journal of Financial and Quantitative Analysis
Year: 1979
Volume: 14
Issue: 2
Pages: 443-450

Score contribution per author:

2.018 = (α=2.02 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

The widespread notion that dollar-cost averaging can help an investor minimize the risk of investing all of one's capital in the market at an inappropriate time is aptly stated by Malkiel [4, p. 242]:Periodic investments of equal dollar amounts in common stocks can substantially reduce (but not avoid) the risks of equity investment by insuring that the entire portfolio of stocks will not be purchased at temporarily inflated prices. The investor who makes equal dollar investments will buy fewer shares when prices are high and more shares when prices are low.

Technical Details

RePEc Handle
repec:cup:jfinqa:v:14:y:1979:i:02:p:443-450_00
Journal Field
Finance
Author Count
1
Added to Database
2026-01-25