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<p>[QUOTE=&quot;Cloudsweeper99, post: 1154785, member: 3011&quot;]I&#039;m not sure that the person in #1 of your examples belongs in the stock market at all, even with dollar cost averaging.&nbsp; DCA can&#039;t protect a person from terrible investment choices.</p><p><br /></p><p>As for #2, I would venture to guess that many if not most people using DCA won&#039;t invest anyway when the market is in free fall.&nbsp; They will skip a payment or make some other modification that will make the long term return even worse than the expected return.</p><p><br /></p><p>And what might even be worse, the person using DCA might become overconfident in the technique.&nbsp; And after using it for a number of years, if the market suddenly falls, the investor could lose an enormous amount of money compared to the small monthly contribution.&nbsp; I think very few people who are not fairly advanced in investment knowledge could stand the loss or are mentally prepared for it.&nbsp; If someone putting in $100 per month for a decade or more suddenly loses $6,000, the strain will be enormous.&nbsp; They are more likely to cash out whatever remains than to throw more money into it.</p><p><br /></p><p>So I don&#039;t like dollar cost averaging for the psychological reasons as well as the operational ones.&nbsp; Look what happened to many people investing this way in their 401ks.&nbsp; They&#039;ve largely been crushed over the past few years from cashing out at the lows.[/QUOTE]</p><p><br /></p>

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