Does the DCA strategy inspire newbies to invest?

[Tongley]

When newcomers learn about DCA, they become more interested in investing in bitcoin because they feel more at ease with it, as it is more flexible. For this reason, I will agree with you if you have someone to guide you, orientation is important when you are told what to do to avoid falling into the wrong hands, and there is a better way for anyone to be able to trade when they know what to do. And when you want to do DCA, the only thing that you need is for you to have a source of income, which makes DCA very convenient to do because you won't be able to do DCA when there is no income.

Every person needs to have a long-term goal, trading is not a good or right decision at all. The chances of a person facing losses while trading are much higher. We can compare trading to a kind of gambling. Do not put anyone at risk by asking them to trade and do not push them towards losses. We are discussing long-term investments in this thread, so do not mislead anyone by asking them to trade.

Our source of income is not enough to invest, rather we need a source of discretionary income to invest. Whenever you invest from your source of income or from your main income, you may be able to invest the required amount of money and whenever you invest the required amount of money, you may not be able to maintain your investment in the long term. It is always a good idea to invest an amount of money that you will not need in the long term or that your financial situation will not be strained even if you face a loss of this amount. This is why it is always advised to invest through discretionary income.

[Obulis]

It does because they are just starting and will be struggling to invest properly while still on the learning process, it also gives room for correction of mistakes in other to become perfect .

DCA remains the best strategy which newbie can adopt in other to make investing stress free also for older investors makes use of accumulation whenever they want to. It's for everyone not only for newbies.

I agree that the DCA is a good strategy because it gives investors the opportunity to buy bitcoin little by little  at a regular interval  without taking  into consideration how big or small an investor discretionary is. And also not having to perfect time the market or trying to predict the next direction the market will take next.

But I wouldn't call it the best strategy fo everyone because different investors have different financial situation and goals. DCA is good because it promote consistency and discipline regardless of one financial capacity, not because it is the best strategy.

Dollar Cost Averaging "DCA" has actually stand above just promoting consistency and discipline irrespective of investor's financial capacity and as well removing emotional pressure and stress of always timing the market to really being the best strategy for a newbie and others. When you say this thing or strategy is the best it doesn't mean other strategies will not be in use by people. Take the football club for example, over a decade now some clubs has done so wonderful and among them are the best clubs the world has right now but that doesn't mean that the other clubs that are not doing well by almost every standard does not have fans. Best clubs has fans just as the weak or worst clubs has fans.
That DCA strategy is the best doesn't mean that other strategies won't be used by others.

[Saltysugar99]

When newcomers learn about DCA, they become more interested in investing in bitcoin because they feel more at ease with it, as it is more flexible. For this reason, I will agree with you if you have someone to guide you, orientation is important when you are told what to do to avoid falling into the wrong hands, and there is a better way for anyone to be able to trade when they know what to do. And when you want to do DCA, the only thing that you need is for you to have a source of income, which makes DCA very convenient to do because you won't be able to do DCA when there is no income.

Every person needs to have a long-term goal, trading is not a good or right decision at all. The chances of a person facing losses while trading are much higher. We can compare trading to a kind of gambling. Do not put anyone at risk by asking them to trade and do not push them towards losses. We are discussing long-term investments in this thread, so do not mislead anyone by asking them to trade.

Our source of income is not enough to invest, rather we need a source of discretionary income to invest. Whenever you invest from your source of income or from your main income, you may be able to invest the required amount of money and whenever you invest the required amount of money, you may not be able to maintain your investment in the long term. It is always a good idea to invest an amount of money that you will not need in the long term or that your financial situation will not be strained even if you face a loss of this amount. This is why it is always advised to invest through discretionary income.

I basically agree with this statement. Especially seeing Bitcoin investment as a long-term accumulation, not chasing short-term trading and investing according to one's discretionary income increases the chances of a person achieving success. I also agree with you that in Bitcoin investment, investor must first understand financial capacity. Just because income is coming from a job or business, that entire income does not become available for investment. The income will come , the necessary expenses reduced fund . And if a back up fund is not formed, then he has to keep some money there too, and then accumulate bitcoin with the extra fund . Because the biggest advantage of long-term investment is not just holding Bitcoin it is creating the financial ability to hold. If you buy Bitcoin with money that you will need in a few weeks or months, then no matter how much you call yourself a long-term investor, real life may not allow you to follow that plan. Ultimately, Bitcoin investment is not a race where you have to show profit every day. It is a process where you gradually build a Bitcoin position according to your financial capacity and give enough time so that the long-term effect of your financial condition positively.

[Yablee0]

Any newbies that have a good orientation in their first Bitcoin investments are always difference from those that just jump into the investments without understanding or having a background guide, all those types of newbies are not end well in their investments. Because they think they wise that’s why they prefer to work with their own decisions without being told by others, and if a person have knowledge about investments with difference people it allow them to get much experience on they can handle their future investment and also market volatility.

So if a newbie bitcoiner figures out that he has discretionary funds and he wants to start to buy bitcoin, then you are saying that he can't get started? 

You are saying that the newbie bitcoin has to ask others what to do before he can get started? 

That is a strange requirement that you seem to be putting on newbies.

There is no point for a new investor to start seeking consent around before venturing in to Bitcoin investment when his discretionary funds is already intact. As a matter of fact, the only reason that can prevented someone (any person at all) from investing is when he is unable to get it (discretionary funds) figured out.  Possibly, this is the necessary orientation and requirement you  need to get started. Otherwise waiting for people's validation or whatever before embarking on your investment journey will only hold you backward or slow down your investment process which is absolutely not a good one for any Bitcoin newly investor.

[Sticky Bomb]

Instead of trying to figure out "Is this the right time to buy?" Newbies can follow a simple rule, "Invest a fixed amount regularly, regardless of the current price" that's how DCA is easy to understand

It's not always the best to have a fixed amount, there may be occasions whereby expenses are high, resulting in little or no discretionary income for the said period and if the person's operates with a fixed amount, he might try to smart his way and ignore some expenses in order to meet up with the fixed amount, this might affect him negatively and he may struggle to cope with his finances within the said period which can be described as overaggressiveness.

It's best investment amount is tailored to available discretionary income, when you have more money available, you can increase it and when you've less, you invest lesser and when you've none, you wait for the next time discretionary income becomes available to continue investing. This doesn't mean you're not consistent, as long as you're investing whenever you've discretionary income available, you're being consistent.

[icebar]

When newcomers learn about DCA, they become more interested in investing in bitcoin because they feel more at ease with it, as it is more flexible. For this reason, I will agree with you if you have someone to guide you, orientation is important when you are told what to do to avoid falling into the wrong hands, and there is a better way for anyone to be able to trade when they know what to do. And when you want to do DCA, the only thing that you need is for you to have a source of income, which makes DCA very convenient to do because you won't be able to do DCA when there is no income.

Our source of income is not enough to invest, rather we need a source of discretionary income to invest. Whenever you invest from your source of income or from your main income, you may be able to invest the required amount of money and whenever you invest the required amount of money, you may not be able to maintain your investment in the long term. It is always a good idea to invest an amount of money that you will not need in the long term or that your financial situation will not be strained even if you face a loss of this amount. This is why it is always advised to invest through discretionary income.

Discretionary income does not necessarily have to have a separate source. If your monthly basic income is $1000 and you spend $800 on rent, food, medical expenses or all your essential expenses, then the remaining $200 will be considered as your discretionary money. For this, you do not have to look for another job but come from the same job.

Someone else may have a monthly income of $2000 from difference sources of income. But if all his essential expenses are the entire $2000, then he does not have discretionary income for that month. So, the main thing is how much is left after these essential expenses. It is not whether there is a discretionary income source.

[JayJuanGee]

You know newbie investors will always at first show why they are newbies, irrespective of how much orientations  you give them about bitcoin, when market volatility is high. But as they continue to grow with their investment, they begin to develop thick skin to withstand the market volatility and get use to it on their own. Experience will always make people understand things more and know how to go about it, than when they just it learn from other people without having first hand experience.

Any newbies that have a good orientation in their first Bitcoin investments are always difference from those that just jump into the investments without understanding or having a background guide, all those types of newbies are not end well in their investments. Because they think they wise that’s why they prefer to work with their own decisions without being told by others, and if a person have knowledge about investments with difference people it allow them to get much experience on they can handle their future investment and also market volatility.

So if a newbie bitcoiner figures out that he has discretionary funds and he wants to start to buy bitcoin, then you are saying that he can't get started? 
You are saying that the newbie bitcoin has to ask others what to do before he can get started? 

That is a strange requirement that you seem to be putting on newbies.

One mistake some of us often make is that we assume that since someone is new to Bitcoin, it means that they're also completely new to investing.

We tend to forget that one can be a newbie in Bitcoin and crypto but already have multiple years of experience in investing in stocks, bonds or other assets. For someone with sort of experience, they only need to understand the basics of Bitcoin like how to buy, properly secure it, the risks involved and patience needed to begin investing without seeking for anyone's advice or opinion. If such person has discretionary income and wants to invest, they'll do so without asking for anyone's permission because they already know what investment actually entails.

For every newbie, learning how to invest in Bitcoin is very important but there's a difference between having the knowledge and waiting for approvals before taking your decision. Sometimes, you even gain better experience by making your own decisions and learning from the outcomes.

It seems to me that the more important skill is cashflow management rather than investing experience, yet the point is still taken that newbies can have a variety of skills, knowledge and experience by the time they first start buying bitcoin, and yeah some of the skills will be more important than others, and many times normal people can identify various areas that they might need additional practice, and while in bitcoin they can adjust their position size (weekly DCA or other amount) to their comfort level and as they are learning and becoming more comfortable, then they can increase their investment size in accordance with their becoming more comfortable.

To illustrate the point, I frequently will use an example of a guy who knows that he has $100 per week that he could use to buy bitcoin,  yet he purposefully chooses to start out with $30 per week while he is becoming more comfortable with bitcoin and/or with factors around his cashflow management.

[Obulis]

Instead of trying to figure out "Is this the right time to buy?" Newbies can follow a simple rule, "Invest a fixed amount regularly, regardless of the current price" that's how DCA is easy to understand

It's not always the best to have a fixed amount, there may be occasions whereby expenses are high, resulting in little or no discretionary income for the said period and if the person's operates with a fixed amount, he might try to smart his way and ignore some expenses in order to meet up with the fixed amount, this might affect him negatively and he may struggle to cope with his finances within the said period which can be described as overaggressiveness.

It's best investment amount is tailored to available discretionary income, when you have more money available, you can increase it and when you've less, you invest lesser and when you've none, you wait for the next time discretionary income becomes available to continue investing. This doesn't mean you're not consistent, as long as you're investing whenever you've discretionary income available, you're being consistent.

The situation you pointed at can only be if the investor doesn't have emergency funds or the emergency funds available is not enough, if not DCAing with a fixed amount will happen without any negative effects like you struggling to cope with your finances. Don't forget that keeping emergency funds is part of your investment goal so that when unplanned or emergency expenses comes up you spend from your emergency funds and continue DCAing.

[avp2306]

Instead of trying to figure out "Is this the right time to buy?" Newbies can follow a simple rule, "Invest a fixed amount regularly, regardless of the current price" that's how DCA is easy to understand

It's not always the best to have a fixed amount, there may be occasions whereby expenses are high, resulting in little or no discretionary income for the said period and if the person's operates with a fixed amount, he might try to smart his way and ignore some expenses in order to meet up with the fixed amount, this might affect him negatively and he may struggle to cope with his finances within the said period which can be described as overaggressiveness.

It's best investment amount is tailored to available discretionary income, when you have more money available, you can increase it and when you've less, you invest lesser and when you've none, you wait for the next time discretionary income becomes available to continue investing. This doesn't mean you're not consistent, as long as you're investing whenever you've discretionary income available, you're being consistent.

The situation you pointed at can only be if the investor doesn't have emergency funds or the emergency funds available is not enough, if not DCAing with a fixed amount will happen without any negative effects like you struggling to cope with your finances. Don't forget that keeping emergency funds is part of your investment goal so that when unplanned or emergency expenses comes up you spend from your emergency funds and continue DCAing.

In reality the financial situation of people does not move in straight line. Because there are lots of factors that can affect their financial state, since there are certain changes happening in their life like income fluctuation, seasonal cost and their family obligation.

This is the reason why many people like the flexibility what DCA could do for them, because despite of some challenges came it help people to remain consistent with their investment. Also they should invest when there's discretionary income appears and better not to force anything like putting same amount in every period while they are struggling.

There's no doubt that emergency is helpful to us investors, but it does not eliminate the risk that's why people still need flexibility. Then this is when we could see that DCA is truly a great strategy to use, because it naturally adapts on real time financial situation of each people or investor, instead of assuming that they can put the same figures every week or month.

[Proty]

Instead of trying to figure out "Is this the right time to buy?" Newbies can follow a simple rule, "Invest a fixed amount regularly, regardless of the current price" that's how DCA is easy to understand

It's not always the best to have a fixed amount, there may be occasions whereby expenses are high, resulting in little or no discretionary income for the said period and if the person's operates with a fixed amount, he might try to smart his way and ignore some expenses in order to meet up with the fixed amount, this might affect him negatively and he may struggle to cope with his finances within the said period which can be described as overaggressiveness.

It's best investment amount is tailored to available discretionary income, when you have more money available, you can increase it and when you've less, you invest lesser and when you've none, you wait for the next time discretionary income becomes available to continue investing. This doesn't mean you're not consistent, as long as you're investing whenever you've discretionary income available, you're being consistent.

The situation you pointed at can only be if the investor doesn't have emergency funds or the emergency funds available is not enough, if not DCAing with a fixed amount will happen without any negative effects like you struggling to cope with your finances. Don't forget that keeping emergency funds is part of your investment goal so that when unplanned or emergency expenses comes up you spend from your emergency funds and continue DCAing.

An investor doesn't need to used a fixed amount of money to DCA before it should be called DCA strategy. There are people that doesn't have a stable source of income and for such folks they may find it difficult to stick with a fixed amount of money to DCA with. Therefore, it will be best to always DCA with whatever amount of discretionary income we have in our disposal instead of going with a fixed amount that may put the person into financial pressures. DCA strategy should be done in away that it's suitable for our financial situation, so for those without regular income they can decide not be using fixed amount since this is suitable with their financial situation. There is always room for flexibility while using the DCA strategy.

[Saltysugar99]

In reality the financial situation of people does not move in straight line. Because there are lots of factors that can affect their financial state, since there are certain changes happening in their life like income fluctuation, seasonal cost and their family obligation.

I agree with this point. In real life, no one financial situation is the same every month. Today's income is good, a few months later, income may decrease. Also family responsibilities may increase, medical expenses may come, and a bonus or extra income may come in some month. So it is not right to make a Bitcoin investment plan in such a way that income and expenses will remain the same for the next years.

But this is why backup funds are even more important. If you have to stop buying Bitcoin when income or expenses change, or worse, sell existing Bitcoin, then the financial setup was not very strong. Backup funds give the investor some flexibility. In case of a minor mistake, decrease in income or unexpected expense, the investor gets the opportunity to manage the situation without immediately depending on the Bitcoin holding .

This is the reason why many people like the flexibility what DCA could do for them, because despite of some challenges came it help people to remain consistent with their investment. Also they should invest when there's discretionary income appears and better not to force anything like putting same amount in every period while they are struggling.

A common misunderstanding needs to be cleared. There is no such rule that DCA means buying exactly $100 every particular day . DCA can be manual, automatic, the amount can change, and if income is irregular, the buying time can also change. So, a freelancer or contract worker does not have to have a fixed salary to accumulate Bitcoin. Suppose someone gets $150 discretionary income after paying expenses this month. He might buy $50 or $100 Bitcoin. The next month, only $20 is available due to extra expenses, so he can buy $20 or buy nothing depending on the situation. The next month, he gets $300 discretionary income. He can buy more. This did not make his investment plan fail. Rather, he is planning in line with his real cashflow.

There's no doubt that emergency is helpful to us investors, but it does not eliminate the risk that's why people still need flexibility. Then this is when we could see that DCA is truly a great strategy to use, because it naturally adapts on real time financial situation of each people or investor, instead of assuming that they can put the same figures every week or month.

It is true that emergency or backup funds do not eliminate risk. There is no guarantee that any backup fund will be so big that it will cover all possible problems in life. But the purpose of backup funds is not to completely remove risk. The purpose is to create a financial situation so that you do not have to sell Bitcoin due to common unexpected expenses.

DCA itself does not automatically adapt to your financial situation. The investor has to adapt to it. And it would not be right to consider DCA as a complete risk management system. DCA is basically a method of accumulating Bitcoin. Backup funds, expense management, discretionary income, and position sizing are separate issues. When these work together, the system becomes strong .

[Rabata]

Instead of trying to figure out "Is this the right time to buy?" Newbies can follow a simple rule, "Invest a fixed amount regularly, regardless of the current price" that's how DCA is easy to understand

It's not always the best to have a fixed amount, there may be occasions whereby expenses are high, resulting in little or no discretionary income for the said period and if the person's operates with a fixed amount, he might try to smart his way and ignore some expenses in order to meet up with the fixed amount, this might affect him negatively and he may struggle to cope with his finances within the said period which can be described as overaggressiveness.

It's best investment amount is tailored to available discretionary income, when you have more money available, you can increase it and when you've less, you invest lesser and when you've none, you wait for the next time discretionary income becomes available to continue investing. This doesn't mean you're not consistent, as long as you're investing whenever you've discretionary income available, you're being consistent.

The situation you pointed at can only be if the investor doesn't have emergency funds or the emergency funds available is not enough, if not DCAing with a fixed amount will happen without any negative effects like you struggling to cope with your finances. Don't forget that keeping emergency funds is part of your investment goal so that when unplanned or emergency expenses comes up you spend from your emergency funds and continue DCAing.

The problem is not that you don't have an emergency fund. You may have a large emergency fund, but there is no guarantee that you will have the same amount of discretionary income every month. Your monthly income may be $1,300, your normal expenses may be $1,000, so you may be comfortable buying with $200. But if next month your household or other expenses increase to $1,200, you may have a large emergency fund, but your investment capacity that month may not be the same. If you take money from your emergency fund just to maintain a fixed amount of $200 in the first place, this is not a solution, but rather you are prioritizing your Bitcoin purchase plan over your real financial situation.

[ChocolateBitcoinK]

Instead of trying to figure out "Is this the right time to buy?" Newbies can follow a simple rule, "Invest a fixed amount regularly, regardless of the current price" that's how DCA is easy to understand

It's not always the best to have a fixed amount, there may be occasions whereby expenses are high, resulting in little or no discretionary income for the said period and if the person's operates with a fixed amount, he might try to smart his way and ignore some expenses in order to meet up with the fixed amount, this might affect him negatively and he may struggle to cope with his finances within the said period which can be described as overaggressiveness.

It's best investment amount is tailored to available discretionary income, when you have more money available, you can increase it and when you've less, you invest lesser and when you've none, you wait for the next time discretionary income becomes available to continue investing. This doesn't mean you're not consistent, as long as you're investing whenever you've discretionary income available, you're being consistent.

The situation you pointed at can only be if the investor doesn't have emergency funds or the emergency funds available is not enough, if not DCAing with a fixed amount will happen without any negative effects like you struggling to cope with your finances. Don't forget that keeping emergency funds is part of your investment goal so that when unplanned or emergency expenses comes up you spend from your emergency funds and continue DCAing.

If an investor regularly invests a certain portion of his income in Bitcoin through DCA, he also keeps an emergency fund that can handle unexpected medical expenses, or any unavoidable expenses. Then, if a sudden expense arises, he will not have to sell Bitcoin. As a result, his long-term investment plan can remain intact. Emergency fund is a safety net in investment planning. In the case of volatile assets like Bitcoin, if the market declines during an emergency, the need to sell comes together, then the temporary decline in value can turn into a real loss. Even if the size of the emergency fund is sufficient, if someone invests more money in DCA than he can afford, other financial goals may be affected. Therefore, the amount of DCA should also be consistent with the person's overall financial plan. Another important point is that the emergency fund money and the investment money should not be combined. Having a separate liquid fund in advance, rather than relying on Bitcoin for emergency needs, allows the investor to make decisions somewhat independently of market fluctuations. It is also not right to assume that the amount of the emergency fund will be the same for everyone. A salaried employee, a person with irregular income and a businessman do not all have the same financial risk. Similarly, the amount of family responsibilities and expenses may also be different. Creating a financial structure where even if an emergency situation arises, the investor does not have to panic and sell assets. And in normal circumstances, he can continue his long-term investment plan with discipline.