re: #528 itellu3times

On every sale, there is a winner and loser. Mutual funds over the past 10 years have had profits, even if the DJIA isn’t any higher than it was 10 years ago. Take Fidelity Contrafund (FCNTX) for example.*

That’s a 10 year chart. It shows jagged peaks and valleys, mirroring the market generally. However, if you’re dollar cost averaging (DCA) over that time, you can end up significantly ahead, because if you’re putting $5000 into FCNTX during those down markets, you end up with that many more shares than when you’re buying during the highs. Over time, you end up ahead, particularly with the distributions and reinvestment of dividends. In the 10 year period there, I’ve made a tidy profit for my IRA, and that’s even after rolling it over into a Roth from a traditional IRA at a time when the market was down (2003).

Take the Nikkei 250, and while it is nearly unchanged from 1984, there are significant swings that mean buying opportunities under DCA.

* disclosure - I own FCNTX, so I have personal experience.