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If one is investing from an income stream, dollar cost averaging is about the only way to do it. You can't invest the money before you have it. But if one is sitting on a pile of cash, on average (meaning if one is in this situation multiple times), one comes out better by investing the lump sum up immediately.
However, the variation of outcomes with lump sum investing is larger than if one invests a bit at a time. One either wins or loses, as opposed to having a whole range of possible outcomes in the middle. Because people are risk averse, they're willing to take the lower expected value than run the risk that they might lose bigger by investing it all at the wrong time.
Vanguard used to offer a dollar cost averaging service for transaction fee funds where one could set up periodic investments, min $100, min two investments, for $3/purchase. At that rate each incremental $1000 investment in OSTIX would break even in about a year. That would be assuming the shares were not later sold, or were sold as part of a larger transaction, thus incurring no additional cost to sell.
There is even a January 25, 2021 Vanguard commission and fee schedule claiming that Vanguard still offers this service. But the service is not shown on the HTML version of the fee schedule. And this article on Vanguard automatic investing has a screen shot saying that automatic investments are only allowed on Vanguard funds. (I see the same thing in my own account.) So I believe this Vanguard feature is defunct.
But automatic investing is available at Fidelity, $5/transaction, and you can stop after one transaction. One could purchase OSTIX at Vanguard ($20) or Merrill Edge ($19.95), transfer it in kind to Fidelity (no transfer fee), and continue investing there.
A fair amount of work. But depending on how you value your time, it could still be worth the effort. For as you put it, it saves nickels and dimes. The ability to add cheaply to lower cost (institutional) shares is one of the reasons I use Fidelity.
There are often obscure ways to "watch the pennies" if one looks hard enough.
But automatic investing is available at Fidelity, $5/transaction, and you can stop after one transaction. One could purchase OSTIX at Vanguard ($20) or Merrill Edge ($19.95), transfer it in kind to Fidelity (no transfer fee), and continue investing there.
Don’t forget that selling is free at Fidelity whereas it costs $20 to sell. There are other subtle differences. Institutional shares of Pimco funds require $25K while $1M at other brokerages.
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https://indexacapital.files.wordpress.com/2017/07/dollar-cost-averaging-just-means-taking-risk-later-vanguard-2012.pdf
However, the variation of outcomes with lump sum investing is larger than if one invests a bit at a time. One either wins or loses, as opposed to having a whole range of possible outcomes in the middle. Because people are risk averse, they're willing to take the lower expected value than run the risk that they might lose bigger by investing it all at the wrong time.
With respect to axioms and aphorisms, how about: Take care of the pence for the pounds will take care of themselves? Or the more familiar American currency version: Watch the pennies and the dollars will take care of themselves.
Vanguard used to offer a dollar cost averaging service for transaction fee funds where one could set up periodic investments, min $100, min two investments, for $3/purchase. At that rate each incremental $1000 investment in OSTIX would break even in about a year. That would be assuming the shares were not later sold, or were sold as part of a larger transaction, thus incurring no additional cost to sell.
There is even a January 25, 2021 Vanguard commission and fee schedule claiming that Vanguard still offers this service. But the service is not shown on the HTML version of the fee schedule. And this article on Vanguard automatic investing has a screen shot saying that automatic investments are only allowed on Vanguard funds. (I see the same thing in my own account.) So I believe this Vanguard feature is defunct.
But automatic investing is available at Fidelity, $5/transaction, and you can stop after one transaction. One could purchase OSTIX at Vanguard ($20) or Merrill Edge ($19.95), transfer it in kind to Fidelity (no transfer fee), and continue investing there.
A fair amount of work. But depending on how you value your time, it could still be worth the effort. For as you put it, it saves nickels and dimes. The ability to add cheaply to lower cost (institutional) shares is one of the reasons I use Fidelity.
There are often obscure ways to "watch the pennies" if one looks hard enough.