Replacing Emotion With Discipline Using Dollar Cost Average (DCA)

Posted On February 6, 2019 1:53 pm
By: Steve Smith

Mike Tyson’s infamous quote that, “everyone has a plan until they get punched in the mouth” is often, and appropriately applied to stock market investors, who claim they’d love to see a market decline that would allow them to buy stocks on the dip.

But often times when that sell-off comes, it’s deeper and steeper than expected. In turn, planned purchases turn to paralysis, or worse, there’s a panic into selling existing holdings.

The dramatic decline during this past fall — which took the indices into a bear market and many individual stocks down by 30% or more — seemed to put an end to investors ‘buy the dip’ mentality.

Unfortunately, rather than taking advantage of…

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About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.