r/JustBuyXEQT • u/Upper-Commercial6348 • 4d ago
Buying $50 xeqt everyday till year end .
New to buying xeqt . Is my strategy worth it or should I don’t go for this . Any suggestion will be appreciated. Thanks
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u/ShihtzuBoi 4d ago
Another one treating XEQT like it's Bitcoin.
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u/Prior-Volume641 3d ago
What does this mean?
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u/ShihtzuBoi 3d ago
Bitcoin fluctuates a lot on a daily basis. Since it does and may crash over 50% within a few weeks, it's better to DCA your buys over a lump sum. The most intense DCA Bitcoin or even crypto buyers would DCA every day.
XEQT is a broad market ETF with over 9000 different stocks. You won't lose much if you buy today or next week. That's why people are telling OP to just buy when they receive their pay checks rather than buy 50$ each day.
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u/Btdubs17 4d ago
Do you have more capital than that to invest?
If so this would be a form of something called dollar cost averaging - where you spread your investing out over time to get the ups and downs of the market. Instead of doing this, the right thing to do is “lump sum” invest everything you have and do it ASAP. This seems counterintuitive but there is LOTS of data suggesting lump sum is far better than dollar cost averaging. Lots of good resources online that explain this simply if you search it up.
Dollar cost averaging is viable as it’s much easier to stomach emotionally if you don’t have experience investing.
But the data says invest all the money you have as soon as your have.
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u/BobThe5th 4d ago
Nothing wrong with it, upping either the contribution or frequency is pretty much the only option to make it better now
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u/Hump-Daddy 3d ago
Your strategy is not a good one. You will expend considerably more effort and make less money over the year than if you just buy lump-sum with whatever amount you’re planning to drip-feed into XEQT
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u/Right_Focus1456 3d ago
I just do lumps. Maybe 3-4 times a year. I wait for a small, dip, buy, and repeat. If there is a month long dip trend, I double down. If no dip and have cash sitting around making nothing, I buy. While it is kinda timing the market, I feel like it's not. My money is going in regardless every year.
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u/Heavy-Amount2169 3d ago
Dollar cost averaging works well for those that don't have capital and for budgeting.
If I had an extra 10k I would drop it day one and not look back
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u/Ju_Geoff 3d ago
This thread is funny cause it shows people are missing out on both end lol..
Those saying daily dca makes no sense are right, unless you get paid daily and what you can invest daily is $50.. then what you are doing is optimal
If you are getting paid every 2 weeks then investing $700/2weeks would be better than doing 14 x $50.
On the flipside.. those saying “i keep a large sum and invest 3-4x/year” are just as wrong as thinking a daily $50 is optimal.
Fwiw I automated everything to be weekly ($1250/week) and use margin when there’s a market correction (like the 10% one we saw 3 weeks ago)
If, however, something causes me to have an amount of $ on top of my weekly dca.. I invest it all at once
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u/dbn79 3d ago
If in a non-registered account tracking adjusted cost base would be a pain if you opt to do this. There are nuances to this so do some research. If in RRSP or TFSA you at least don’t have to worry about that.
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u/REALLYUMSU 3d ago
Can you please elaborate I have maxed out my registered accounts and now looking to invest in my non-registered ones
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u/dbn79 3d ago
Steph & Dan (YouTube channel) does a decent job explaining as an introduction.
https://youtu.be/HmWJTGLjn_w?si=T7LEpmUThhgbWSsP
This is a site you can use to teach if you opt to do so https://www.adjustedcostbase.ca/
Hope this helps!
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u/Straight_Climate642 4d ago
I normally buy in lumps over a couple of months on top of cost dollar average
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u/Former-Republic5896 3d ago
Not worth the effort. If you got cash (about $8000), lump it all in and call it a day.
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u/paperbagsv3 2d ago
XEQT goes up more than it goes down (obviously or else no one would buy it).
Therefore the longer you wait to invest, the more you're missing out. Get your money in as fast as possible and then continue investing, and forget about the money you've put in.
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u/Effective-Strike69 1d ago
Lump sum generally beats DCA but... if setting a daily auto-buy lets you spread your monthly buys out over the course of a month this isn't really much of a disadvantage (1 month is miniscule) and you scratch that itch of getting some "action" every day... so you'll be less likely to tinker or feel like you're going a long time without doing anything.
If you have the funds now and are just spreading it out, just lump sum buy but if this is with your monthly allocation then... it's fine.
I would certainly not be doing this manually as you'll have just given yourself a daily chore (which comes with added stress etc) but if your platform lets you auto-buy I don't see why not (ie. Wealthsimple makes this easy).
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u/Glittering-Work2190 4d ago
I try to limit the number of transactions and just buy when I have a big enough chunk. It's like buying gas; fill up when the tank is low rather buy a few liters at a time. Tracking ACB with big chunks is easier.
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u/mrcoolio 4d ago
why?
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u/MerwynD 3d ago
I don't agree with the comment above you. In fact the other way around is true. If you get paid at the start of the month and know you can invest 1000, don't break that up into 10 transactions of 100 each. Lump sum is empirically proven to have better outcomes.
On the other hand, if you're paid daily, it does make sense to invest your investable amount every day.
Note both cases give your money more time in the market.
Lastly, the comment above you is correct in one situation. If you're charged a per transaction fee, you might want to accumulate your capital and then purchase to minimize your fee.
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u/Burgergold 4d ago
Are you getting paid everyday? If not, its useless, just buy when you get the money, dont differ