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There are a couple of points with regard to your thesis that I think you ought to consider, Tinker.

One is that dollar-cost averaging works only if (a) one has the discipline to follow it through month after month, come rain or come shine, without exception and (b) there is a regular inflow of funds into the investment account. Assuming that one has the discipline to carry out (a) (a huge assumption) and that one's choices don't fall apart, the absence of (b) means that one will not have the cash to buy those now-cheaper shares unless he sold at least a portion of his holdings at or near the top.

The second is that it is virtually impossible to forecast a top in advance (though it's relatively simple to do it while it's occurring). Thus overdue caution with regard to a possible top may prevent one from buying into a stock just when he ought to be doing so. What matters is not so much the point in the market cycle at which one buys, but the willingness to recognize that one may have been in error to buy when he did and to move to the sidelines until his view of the landscape becomes more clear.
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