Dollar Cost Averaging for the Fully Invested

Intra-portfolio dollar cost averaging is the only way a fully invested portfolio can earn more than the sum of its parts… Adding to our previous discussion around the benefits that volatility generates for dollar cost averaging strategies, we now consider whether those benefits can be exploited by the fully invested. Again, the excess returns come from the fact that DCA exploits the «buy more low» and «buy less high» aspect of fixed-dollar investments, and are enhanced by additional volatility.