๐๐ก๐ฒ ๐ข๐ง๐ฏ๐๐ฌ๐ญ๐ข๐ง๐ ๐ซ๐๐ ๐ฎ๐ฅ๐๐ซ๐ฅ๐ฒ ๐ฆ๐๐ญ๐ญ๐๐ซ๐ฌ ๐ฆ๐จ๐ฌ๐ญ ๐๐ฎ๐ซ๐ข๐ง๐ ๐๐ซ๐๐ฐ๐๐จ๐ฐ๐ง๐ฌ?
Most investing advice sounds great in bull markets...but market is not always kind.
2008 didnโt feel obvious.
2022 didnโt feel temporary.
Both felt uncertain, scary and emotionally heavy.
Thatโs exactly why HOW you invest matters most during drawdowns.
๐๐จ ๐ฐ๐ก๐๐ญ ๐ญ๐ก๐ ๐๐ก๐๐ซ๐ญ ๐ฌ๐ก๐จ๐ฐ๐ฌ?
Imagine two investors with the same amount of capital. One goes all in near the top. The other invests slowly, consistently, month by month.
Same market. Same risk. Very different experience.
๐๐ก๐๐ง ๐ฆ๐๐ซ๐ค๐๐ญ๐ฌ ๐ฌ๐ญ๐๐ซ๐ญ ๐๐๐ฅ๐ฅ๐ข๐ง๐ , the lump-sum investor feels every red day immediately. Losses show up fast. Confidence fades. Doubt creeps in.
The regular investor?
Theyโre still buying - but now at better prices. Not because they predicted the bottom. But because they didnโt need to.
Using real drawdown periods like 2008 and 2022:
โข Investing everything at once led to much deeper losses
โข Investing regularly reduced the drawdown
โข Not zero losses - just less damage when timing was worst
What is important to note that that Dollar-cost averaging didnโt โbeat the marketโ BUT it simply made the market easier to live through.
๐๐ง๐ ๐ฐ๐ก๐๐ง ๐ฆ๐๐ซ๐ค๐๐ญ๐ฌ ๐ซ๐ข๐ฌ๐?
Hereโs the part people donโt like to admit:
When markets go up, it barely matters how you invest - youโre winning anyway. I'm not saying it doesn't matter but it definitely hurt less.
๐๐ก๐ ๐ซ๐๐๐ฅ ๐ฅ๐๐ฌ๐ฌ๐จ๐ง
Bull markets reward participation.
Bear markets punish bad timing.
Regular investing isnโt about maximizing returns, tโs about minimizing regret.
And thatโs often what keeps you in the game long enough
to benefit from growth at all.
$SPX500$JPM (JPMorgan Chase & Co)$GOOG (Alphabet)$PBR (Petroleo Brasileiro SA Petrobras-ADR)
Illustrative examples based on historical drawdowns. Not investment advice.
... Show More
We use our own and third-party cookies on our websites to enhance your experience, analyze traffic, and for security and marketing. For more info, see our Cookie Policy or go to Manage Settings.
Privacy Preference Center
When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.
More information
Manage Consent Preferences
Strictly Necessary Cookies
Always Active
These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.
Performance Cookies
These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.
Functional Cookies
These cookies enable the website to provide enhanced functionality and personalisation. They may be set by us or by third party providers whose services we have added to our pages. If you do not allow these cookies then some or all of these services may not function properly.
Targeting Cookies
These cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.
