Implementing a Dollar-Cost Averaging Investment Strategy

Abstract

Based upon typical monthly investing, whereby an administrator uses a dollar cost averaging strategy to invest equal amounts of funds into the market each month, the authors explore the question: Does the date of the month on which one puts his money into the stock market affect portfolio returns? They found the answer to be a resonant yes, based upon monthly investments of $1 from 1990 to 2005 invested in three major indices: the Dow Jones Industrial Average, the NASDAQ, and the S&P 500.