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Subject:  Re: Investing Frequency Date:  10/27/2007  3:51 PM
Author:  FoolNBlue Number:  4466 of 5260

(2) An investment strategy, as an alternative to putting an available lump sum into the market all at once. An investment strategy is also essential, but this is not a good one. It's a form of market timing, but strangely, one that doesn't even look at the market!

Lump sum investing is also "market timing" without even looking at the market too.

I understand the logic behind investing as soon as possible (lump sum) because the market tends to trend upwards so by delaying purchases you are probably foregoing more up days than down. While the original question did not refer to DCA (btw investing as one receives funds is not "DCA" it is a bunch of lump investments as funds are available) the accumulation of funds prior to investing also amounts to market timing and theoretically will reduce yields due to the same logic.

That said, I think the market is fairly high right now and will not likely have much net gain in the next 15 months. I am not comfortable investing the entire lump sum (equal to approx 20% of that account) all at once right now. As I also mentioned, by spreading the buy over the next 15 months it keeps my cash position more stable.. it will go down gradually rather than all at once with a recoupment as I save additional cash. It also gives me the option to use the excess cash on hand to take advantage of any opportunities that may arise.

This tangent is a bit off topic from the original question. In response to the original question, I suggested investing as many times as you wish without regard to the number of transactions. I pointed out that I am intentionally creating more transactions by DCA my purchases.

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