The relationship between long-term portfolio investments and growth in the context of asset characteristics and development level

Sugözü, İbrahim Halil; Yaşar, Sema; Verberi, Can

doi:10.1016/j.bir.2022.09.004

Cited by 4 publications

(1 citation statement)

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“…This paper choses a 21 years period from January 2002 to November 2022 for a couple of reasons (Petkov et al, 2022;Sugozu et al, 2023). The first reason is that a 21 years period is a long time and it will contain several market bulls and bears, which shows a realistic market experience (Wang et al, 2023).…”

Section: Research Methods Sample Periodmentioning

confidence: 99%

Comparison of Long-Term Investment Strategies: DCA vs Lump-Sum Investing in the S&P 500 Index

Muhammad Elzafir Habsjah,

Permana

2023

IJMSA

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This research delves into the realm of long-term investments, a domain often navigated by unsophisticated investors who prefer a hands-off, 'set and forget' approach. Central to this investigation are two dominant investment strategies: Dollar-Cost Averaging and Lump-Sum investing. The study meticulously compares the performance of these strategies over a significant 21-year period, from January 2002 to December 2022, a timeline punctuated by major market upheavals such as the Dot Com Bubble and the 2020 Coronavirus crash. Drawing data from the reputable Yahoo! Finance on the S&P 500 index, the research offers a robust backtest of both strategies. The results are illuminating: Lump-Sum investments, especially those made during the nadir of February 2009, realized returns amplifying the initial investment by up to 5.2 times, clearly overshadowing the returns from Dollar-Cost Averaging. Intriguingly, a fusion of both strategies, a hybrid approach, showcased even more impressive gains, hinting at the merits of a diversified investment strategy. Conclusively, within the parameters of this research, Lump-Sum investing emerges as the more potent strategy. However, the study also paves the way for future inquiries, especially concerning the potential of these strategies in the turbulent waters of volatile assets, exemplified by Bitcoin.

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Section: Research Methods Sample Periodmentioning

confidence: 99%