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Dynamic Dollar Cost Averaging – New International Stock Markets Evidence
Keywords: 5 words maximum
dollar cost averaging
Very short description for use in the program to help attendees understand more than a title can describe
Utilizing a set of international stock market data, this research project is to investigate empirically a dynamic investing model enhancing the performance of the traditional Dollar-Cost Averaging (DCA) approach. The proposed approach utilizes the index return distribution curve to allow investors to vary their regular contributions, and thus to take further advantage of stock market declines/fluctuations. The dynamic approach suggests that DCA investors should increase contributions when the standard deviation of the index returns is negative (i.e., significant market decline). This process allows investors to purchase significantly more shares at lower prices, compared to the conventional DCA strategy.
Lead & Corresponding Author
Eric C Lin, Cal State Univ Sacramento
Job Title
Associate Professor of Finance