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Dollar-Cost Averaging with Yearly and Biyearly Installments

Michele Bisceglia () and Paola Zola ()
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Michele Bisceglia: University of Bergamo, Italy
Paola Zola: University of Brescia, Italy

Journal of Applied Management and Investments, 2018, vol. 7, issue 1, 1-14

Abstract: In this paper the authors considered Dollar-Cost Averaging (DCA) strategies with yearly and biyearly installments and compared their gross returns with those of a lump-sum investment for different medium-long term investment time horizons (between 5 and 20 years). The empirical analysis is conducted on several stock indices by means of rolling observation periods. The authors found that the average annual returns of the lump-sum investment are, in general, higher than those of the two considered DCA strategies and the percentage of observations in which the lump-sum outperforms both the considered DCA is higher for longer investment time horizons.

Keywords: investment strategies; dollar-cost averaging; stock indices; rolling windows; investment time horizon; total gross returns; average gross returns (search for similar items in EconPapers)
JEL-codes: G11 O16 C22 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:ods:journl:v:7:y:2018:i:1:p:1-14