Dollar Cost Averaging – what everyone wants to know

HOSTS Alec Renehan & Bryce Leske|23 November, 2021

Meet your hosts

  • Alec Renehan

    Alec developed an interest in investing after realising he was spending all that he was earning. Investing became his form of 'forced saving'. While his first investment, Slater and Gordon (SGH), was a resounding failure, he learnt a lot from that experience. He hopes to share those lessons amongst others through the podcast and help people realise that if he can make money investing, anyone can.
  • Bryce Leske

    Bryce has had an interest in the stock market since his parents encouraged him to save 50c a fortnight from the age of 5. Once he had saved $500 he bought his first stock - BKI - a Listed Investment Company (LIC), and since then hasn't stopped. He hopes that Equity Mates can help make investing understandable and accessible. He loves the Essendon Football Club, and lives in Sydney.

Dollar cost averaging (or DCA) is the investing strategy of dividing up the total amount to be invested and periodically purchasing over time in an effort to reduce the impact of volatility on the investment. Dollar cost averaging is where you invest smaller, fixed amounts on a regular basis. It’s generally done over an extended period. For example; you may have $2000 you want to invest. Rather than investing the lot at once, you might invest $20 every fortnight. It takes away the emotion of buying and selling. Regardless of what the market is doing, if it’s up, or if it’s down, you will invest the same amount each time.You don’t have to think about it. What this means, is when the market is down, you will buy more, and when the market is up, you will buy less. So rather than risking all of your money at once, you buy into the market often, reducing the effect of the market moving up and down. It can be a great way to build wealth over time.

The inaugural Equity Mates Awards are coming. In this episode Bryce and Alec explain all about this new and exciting awards ceremony, click here to cast your vote. We’re calling on you, our Equity Mates community to help recognise some amazing people, so please get involved!

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Bryce: [00:00:31] Welcome to get started investing in this podcast, we cover all the basics that you need to start your investing journey. Are you joining us for the very first time or is this the start of your investing journey? Well, before you dive in with us, our feed is designed to go from the very beginning, so we suggest that you scroll up and started episode one. However, if you do want to dive in and you're feeling brave, then don't let us stop you. Here at GSI, we unpack all the jargon and the confusing bits. We hear your investing stories with the goal of making investing less intimidating. And of course, we want to have a good time along the way. My name is Bryce and as always, I'm joined by my equity buddy Ren. How are you going? 

Alec: [00:01:06] I'm very good. Bryce very excited for this episode where deviating away from our chapter structure, keeping things fresh just as we get towards the end of the year, we there's a few topics that we know are of interest of to the Equity Mates community or we think they're important to touch on, but there might not be quite enough meat on the bone to get a full chapter out of it. So this is our just one off episodes. 

Bryce: [00:01:31] One-Hit wonders, but this is an important one. 

Alec: [00:01:34] We're going to be talking dollar cost averaging. And let's start with a question. Yes. What's more important timing the market or time in the market? 

Bryce: [00:01:42] time in the market! 

Alec: [00:01:44] And let's follow it up with the second question When's the right time to buy? 

Bryce: [00:01:49] Well, I mean, it depends who you ask. Experts, I think, would definitely have a different answer to this. 

Alec: [00:01:56] You're an expert. 

Bryce: [00:01:59] I think in fact, I know experts have a different answer to this. But for us, there is no right time, 

Alec: [00:02:06] the right time to invest. Twenty years ago, the next best time was today. Yeah, but yeah, you're right. Like experts, would say that they can time the market and some might 

Bryce: [00:02:17] not time the market, but they have strategies on when to enter positions. If that makes sense, if 

Alec: [00:02:26] that's not timing the market, 

Bryce: [00:02:27] they're not saying I'm going to buy it when we hit the bottom, but they're like, I'm going to hit it at a strike price or yeah, when it hits us, you know, valuation or when momentum indicators are telling me that they're not necessarily saying on timing of when we're at the peak or trough. 

Alec: [00:02:42] You know what I mean? I do, but I think that's all still timing it. 

Bryce: [00:02:46] Yeah, but they'll wait for it. They're not like picking, do you know what I mean? Like, they'll wait for a price to hit, which is not them going or 

Alec: [00:02:54] where at the bottom. I know what you're saying and this shouldn't be an argument, but I think this timing the market can be more than just picking the top of the shot. Yes. Yeah. But look so anyway. That aside, the dollar cost averaging is the, I guess, the super power for the everyday investor. It allows us to to, I guess, average into positions over a long period of time and really take a lot of the stress. And the concern out of is this the right time to invest? And so that's what we're going to talk about today. We're going to define it. We're going to talk about why we think it's important. We're going to talk about how you actually put it into practise and a few platforms that can help you put it into practise. We in our book, we work through some examples of companies that we could dollar cost averaging to and what it would mean like we did the maths. So we'll talk about that. So we got a lot to cover in this episode. But before we get into that Bryce, we've got a few big things closing out the year here at Equity Mates. As always, as always, and not none bigger than the inaugural Equity Mates Awards. 

Bryce: [00:03:59] That's it. Ren Equity Mates awards are fast approaching. It's the first time we've done this and we're really excited about it. We're giving the Equity Mates community the opportunity to highlight some of the amazing things that have happened this year and to reward the industry, reward some of the guests and experts and community members that have all contributed to Equity Mates media this year. So nominations are open and we're looking for five categories. We're looking for you to nominate in one or all of the categories based on some of the content that we've created this year or some of the products and platforms that are important to you. So we're looking for nominations for Expert Investor of the Year based on experts that have come on any of the Equity Mates media podcasts. We're looking for community member of the year. We're looking for a platform of the year. So I think, you know, your brokers think research platforms, tracking platforms, we're looking for ETF of the year. So your favourite ETF and we are also looking for a business leader or CEO of the year based on episodes that we've done this year. So once you hit your nomination, the form will be in. Our show notes will then name the finalists and it'll be an epic close out to the year. 

Alec: [00:05:12] Yeah. Equity Mates. Across all of the podcasts that we have, we've managed to build a great community of retail investors and we want to use the power of the Equity Mates community and the power of the retail investing community to reward some of those people and platforms that are doing the most for the retail investor community. There's plenty of awards in the top end of town and the institutional side of the market. Let's make that retail investor voice heard. So that's it. Jump to the link in the show notes and submit your nominations. And then when we have the finalists, we'll put them out the vote for the agreement. We'll put that out to a vote from the Equity Mates community. 

Bryce: [00:05:52] Okay, Ren. So DACA dollar cost averaging before we jump into the what is it? Let's use the 2008 global financial crisis to couch what we're saying today. 

Alec: [00:06:02] Yeah, this is my it's one of my favourite investing stories. And for me, this is just an investing story about why you don't need to worry about timing the market. So global financial crisis, a lot of us remember what happened. If we don't remember it first hand, we've watched the Big Short, and essentially it all really kicked off on a Monday, Monday, the 15th of September 2008, to be specific when Lehman Brothers, the investment bank, collapsed. If you had bought a fund, an index fund tracking the S&P 500 on the Friday before the Monday collapse of Lehman Brothers, that would have literally been the worst time to buy it. You buy it on the Friday. On Monday, the bottom falls out of the U.S. economy. Not great. No, you did not time the market well. And in the next six months, you would be hurting in the next six months. You would have lost almost half your money down at the bottom. You were down 46 percent on the 6th of March 2009, so you would have been kicking yourself on the way down. But 10 years later, even when you bought at the very worst time on that Friday before it all fell out 10 years later, you would have more than doubled your money. Amazing. So you would have ridden it halfway down and then all the way back up through what you bought it for and then more than double up 132 percent on the 12th of September 2018. 

Bryce: [00:07:28] Imagine what it would be now. Oh, a 

Alec: [00:07:30] triple. Yeah, yeah. And sure, you know, if you'd bought right at the bottom, oh, you would have made more money. Yeah, but it's nearly impossible to pick the tops in the bottoms. And so for us, that's the important thing that the market has historically always recovered and then some. And even if you look at the very worst points in history where you could have bought and then you zoom out over a long enough time horizon, you're always okay, love the story. 

Bryce: [00:07:59] And hopefully by the end of this episode, you'll understand what we mean by no need to time the market. And that's why a dollar cost averaging comes in. So if you are just starting your investing journey, let's start with what it is. It's an investment strategy. You'll often see it in an acronym of DCA. You might hear people throwing around DACA. It stands for dollar cost averaging. And really, it means that you invest equal amounts into an asset over a period at a regular cadence, at a regular interval, often in small amounts. So to give an example, you might have $2000 that you start with rather than just investing the whole lot at once. Putting it all into an ETF, you might invest $20 every fortnight, $100 every month, the same amount at the same period of time at the same cadence you would have heard. You'll hear next week, actually, that we're talking to a mate of ours, Flynn, who's very good at DCA, and you'll understand how he puts it into practise. But in its simplest form, that's what it is. 

Alec: [00:09:05] Yeah. And there's no there's no set rule about, you know, you have to do it weekly, monthly. Flynn, the guy I was speaking to next week, he sometimes takes daily. Yeah. Oh yeah. The key thing is, whatever works for you based on, you know, how often you get paid, you know, like what your cash flow is like. And then the second thing to keep in mind is the cost of brokerage, but we'll get to that later. The key thing is there's no hard and fast rules, but it is about creating rules that work for yourself to take the decision making out of when to buy and how much to buy. It's like an automated strategy to get into the

Bryce: [00:09:49] market, and I just want to give a shout out to the Equity Mates community. There's a lot of you out there who have started the investing journey come across, come across this concept early and really want to put it in place. The amount of questions that we get about DACA, how to do it, how should I think about it? I really want to be just putting in 500 a month and not looking at it. I think that's really positive and and a great way to start your investing journey because there's it really is a good tool to help build wealth over time. 

Alec: [00:10:16] We should also give a shout out to the tush invest and the invest with queens of the world. I think they've they've done a lot in this space, helping educate people about dollar cost averaging. We've Covid the key reason why which it takes it takes the emotion and the decision making out of buying and selling. The other thing that is great about dollar cost averaging is it allows you to buy more of the shares of a company when the market is down, unless when the the market is up, which means that sort of averages down your your buying price. Yeah. And to explain what I mean by that, if I'm putting a $100 a week into an ETF and the market is down and the ETF is trading at $10, I buy 10 units for my 100 dollars. If the market shoots up to an ETF is now trading at $50. I only buy two units because I'm just putting $100 in every time, so it allows you to average out the selling price and you generally won't buy. You will you won't buy too much when it's too expensive. 

Bryce: [00:11:19] Mm hmm. Yeah, I love this concept. It really for someone you know, it's important to understand the emotions that come with investing in who you are as an investor. But for me, this really just just calms the mind. And if you can stick to it over a period of time and understand the power of it just putting in that $100 every month, not being concerned if the market's going on, not being concerned, if the market's going down, it's it's a great strategy. 

Alec: [00:11:47] So that's a. I guess an overview of what decaying dollar cost averaging is and why someone does it. Let's get really practical now and talk about how we do it and key considerations. And let's talk about our own personal experience with dollar cost averaging. And just it's important to stress that how we do it works for us. But there are plenty of ways to do it. You know, Flynn, who we speak to next week, does daily dollar cost averaging? I definitely don't do that, but we are both dollar cost averaging in a way that works for us. But let's start with the dollar cost averaging that everyone in Australia who works a job does. 

Bryce: [00:12:26] Yeah, superannuation 

Alec: [00:12:29] your dollar cost averaging. You don't even know it.

Bryce: [00:12:31] That's it. You've all been decaying since you've started working, and the whole idea of it is to take the emotion out of it. And you know, there's no better example than superannuation. Your employer pays you the same amount every fortnight, every month. So the same amount of superannuation comes out of your paycheque and goes into the same basket of stocks. Every month the market goes up, the market goes down, your superannuation keeps going in, and over a long period of time, we know the benefits of doing that. So you might not think it dollar cost averaging. You might not even think you're investing, but through superannuation, you are both investing and you are dollar cost averaging. So that is the first way in which both you and I are saying Ren.

Alec: [00:13:12] So yeah, we're all we're all dollar cost averages. The government is not out into all of our lives, but we're saying we shouldn't just rely on that. You should also take take that concept and apply it to your everyday investing as well. So let's talk about how we do it. I'm going to guess that we both do it in a similar way in the sense that we have a core and a satellite approach to our portfolios, which we've touched on a few times before on this podcast. But the core is those key ETFs that set and forget, and then the satellite is where we, you know, maybe try and time the market or pick an individual stock or buy some crypto and stuff like that. And I'm going to hazard a guess that for both of us, the core is basically all dollar cost averaging. 

Bryce: [00:14:00] Absolutely. Yeah. So we're paid. I used to be paid monthly in the corporate world, so I DCA monthly now I'm paid fortnightly, so I DCA fortnightly and I just go down the list of ETFs that I have in my core portfolio. That's how I do it. The way you can slip up is if you have five ETFs and you, you need to be careful about the brokerage you're paying and that sort of stuff. And of course, there are platforms now that don't charge brokerage on ETFs, and we'll get to that in a second. But where you can slip up and lose the theory of DCA is if you start hand picking which ETFs you're going to buy into in the cadence of doing so becomes out of whack. And what I mean by that is if you have five ETFs and all of a sudden you're buying two of those five more often than not, then you're not actually truly doing it at the same cadence. Every time, every time, every time. Yes, you are putting it in every fortnight or whatever it may be. But I think the important thing is you can't keep to that sort of strategy. So I'm doing DCA into ETFs fortnightly and then my satellite is a little different.

Alec: [00:15:03] I got you. So, yeah, yeah, just a few key ETFs for UK index funds that dollar cost average into, and it's just down the list. It's what's the next one? What's the next one? What's the next one? 

Bryce: [00:15:19] Yeah, yeah, really important. How do you think about it when it comes to individual stocks? 

Alec: [00:15:24] I don't dollar cost averaging to individual stocks. Some people would make the argument that you can and I would agree with that for probably more of those like safer blue chip stocks, you know, the Woolworths or the alphabet or the Microsofts or, you know, some of those massive businesses that are that you can be pretty confident are going to be around, but that's not something that I want to do. Mm-Hmm. And I think for most people, it's not something you need to worry about doing just because individual stocks are more volatile and there's more factors that could come into play that could affect a company's fortune. Whereas the concept with dollar cost averaging works when we're buying the whole market because historically we've seen that the whole market just consistently and continuously grinds upwards over a long period of time. Sure, there's periods where it will be down. There are periods where it could lose up to half its value, more than half its value, and that that hurts. But historically, it's always recovered. You can't say the same thing about thematic ETFs or about individual stocks. 

Bryce: [00:16:33] I believe there is a is value in using DACA to get into stocks. So if you have five grand that you're, you know, you're sold on Microsoft or Afterpay or whatever it is, you sold on this. Company, you don't have to put the five grand in straight away, because then you're exposed to one entry price, so you could say that five grand I'm going to put in five hundred a week over the next 10 weeks. Yeah, that's 

Alec: [00:16:59] completely, for example, 

Bryce: [00:17:01] and not have one entry price. Yeah. And that's how you might think about DACA into individual stocks. 

Alec: [00:17:07] Yeah, that's fair. And I guess if you look at how professional money managers do it, they will never enter a position. Well, very rarely will they enter a position all at once. You know, it'll start being a small percentage of their portfolio, or they'll get to know the company more and more. They'll grow more confident. They'll make it a larger position that is completely fair. That's not something that I do. But again, like as long as you have a rules based approach and you stick to it and you're taking the emotion and the decision making out of it, that's a step in the right direction. Mm-Hmm. 

Bryce: [00:17:37] So what are the key considerations? Are they when it comes to DCA? 

Alec: [00:17:42] I think there's probably two other things that come to my mind. I'm sure you've got others, but the number of assets and then the conversation around brokerage. Yeah. So let's maybe let's start with the number of assets. And I guess here it's like the total number and then also like the split across different asset classes. Yeah, yeah. So how do you approach that? 

Bryce: [00:18:02] Well, for me, I like to run a reasonably concentrated portfolio. So we've mentioned before, you know, you might have five ETFs that you would hope are reasonably diverse and not too much overlap to begin with. You need to do that sort of homework to start. And then I just go down the list. So I mean, there's not much more to it than not from my point of view. I think a lot of people get caught up in saying I have $200, but 10 ETFs. How do I say I into that? Well, you know, you're just not going to be able to do that. So you need to have a systematic approach to to actually splitting across multiple assets. But yeah, be careful about having too many ETFs.

Alec: [00:18:42] Yeah, definitely be careful. There's only so many things that you can invest in. Yeah. So I don't have like an all world ETF, because if you look under the hood of an old world ETF, it's basically almost 75 percent US ETF. Yeah, but I have an American one. I Australian one, a European one. 

Bryce: [00:19:02] Do you have a property? 

Alec: [00:19:04] Yeah, I've got one real estate and then I've got some like, I've got gold, but I don't dollar cost averaging to that. I just have a little bit. And now with crypto, I'm even considering whether I want to keep that. But I've got it still so and I just go down the list. The other thing that I do is I also use bamboo. What we are talking about here and what we what platforms we use, there are always other alternatives. So don't take the fact that where we use this one as this is the one that is right for you, like do your research and figure out what works. But for me, bamboo is a really easy way to dollar cost average into cryptocurrency because it just rounds up my spending. 

Bryce: [00:19:42] Yeah, yeah, you just need to make sure that you have it set. And I think bamboo and res both do it like they will put in. They'll wait until their roundup hits a certain point, so it's 50 bucks every single time. But if you're putting $2 here, five dollars there, one point eighty three dollars there, technically, it's not really dollar cost averaging that's just putting money in when it's available. But I think both platforms do it on a regular dollar amount like they'll always put in 50 bucks each time. 50 bucks, 50 bucks. 

Alec: [00:20:11] Yeah, yeah, you're not wrong. Like, maybe it's not a dollar cost averaging, but it's 

Bryce: [00:20:18] it's just consistent 

Alec: [00:20:18] random roundups of like eighty five percent of the way down. Yeah, yeah. I think if people wanted to call that dollar cost averaging, I would have no problem with that. 

Bryce: [00:20:28] Yeah, it's it's not the technical term for dollar cost averaging, but yeah, it's 

Alec: [00:20:33] all right, Mr. Bloody Webster's over here. 

Bryce: [00:20:36] There's nothing wrong with that. I completely agree. 

Alec: [00:20:38] All right. Well, so any how do you approach the asset stuff? 

Bryce: [00:20:42] I've done my research with the types of products that I want, and then I just go down the list. 

Alec: [00:20:46] All stocks, all like property, gold. What are we talking? 

Bryce: [00:20:51] So very similar to you. I've got ETFs that cover us, Australia, Europe, then I've got property. I did have gold. I don't anymore. I've got crypto. ActionScript own not. I like an ETF crypto. Then I have a couple of thematic ETFs the semi, the hydrogen, those sorts of things. 

Alec: [00:21:11] Well, how how much money you're earning weren't getting paid this time. 

Bryce: [00:21:16] I'm not putting money into all of them every fortnight. That's the thing. Yeah, right? So I go down the list hydrogen and semi-literate new new additions. I need to think through that. But yeah, I literally just go down the list. 

Alec: [00:21:28] Yeah, I don't really dollar cost average into those thematic ETFs. I will put money into them at different intervals. Yeah, but for me, I think of them, it's like cool and then like coal light and then sell a lot of cool place. Yeah, they're not satellite. There's still a lot of that, you know, multi-decade set and forget. But it's like the level of risk is one step more than just like a stock market index. 

Bryce: [00:21:58] Yeah, yeah. My biggest learning has actually been to $2, cost more into stocks that are winning in satellite. 

Alec: [00:22:08] It's honestly not a bad play, if you would just dollar cost averaged into Amazon. Exactly. For the last 20 years. Yeah, yeah, yeah. But the question is, how likely are you to pick the next Amazon 

Bryce: [00:22:20] that comes before the day? I think it's like you got to pick your stock first, but I think for me, it's like, if sorry. 

Alec: [00:22:26] The one other thing is, if you had 10 grand to put into Amazon and you were convinced it would make sense to just put the ten grand to spread it out, but it's more as you get paid, putting more into the position. Absolutely. 

Bryce: [00:22:39] Yeah. It's like as you're recognising that this stock is just winning. One strategy is to actually just keep putting more money in. Yeah. And the thing is to stick to that strategy, like don't just cherry pick, I'm going to put another 10 grand in and then forget about it. It's kind of just keep keep doing it as it wins. And I think that's a lesson for me with some of the stocks that have run in my portfolio, just thinking back on what could have been. Yeah. But yeah, so I just stick to the strategy, go down the list and say, Yes, you have bamboo. And I I don't I don't run raise anymore or anything like that. Yeah. So a final consideration is brokerage, and we're going to have a chat about that in a second, as well as some of the platforms that will help you do it. But before we do, we'll just take a quick break to hear from our sponsors. So Ren, it's all well and good to want to buy every day like Flynn, which we'll hear next week, it's all well and good to want to buy monthly. But one major consideration is the cost at which these platforms or your your strategy is going to be taking out of your bank account. 

Alec: [00:23:42] And put very simply, the, you know, back in the day when we started investing, CommSec was probably the cheapest on the market $20 brokerage, and the minimum investment was $500. And so if you were saying every fortnight I was going to invest the minimum in two ETFs because I could put $1000 into the market, $500 and H, that's two sets of brokerage. That's $40 a fortnight being taken out because of brokerage, because a brokerage. And you know, like, I might not feel like a lot, but it's four percent every fortnight that you're starting down because that thousand dollars turns into nine hundred and sixty dollars. And so it means you what have you've invested in has to do four percent or a bit more than four percent just to get back to even. That's in a nutshell where brokerage can hurt. And if you just did the maths on that, like, let's say, every fortnight you are paying CommSec forty dollars to invest, you know, over the course of the year, that's over a grand. 

Bryce: [00:24:45] So the good news is, though Ren that since we started investing in CommSec was the platform, there are now plenty of platforms.

Alec: [00:24:52] Also, this was that wasn't meant to just have a crack at CommSec. CommSec have brought their brokerage down and you know, the competitive, but that's when you the when you're the biggest player in the market, people use you as an example. 

Bryce: [00:25:04] So look, there are a good. The good news is that there are now platforms that charge $0 brokerage, so you can get into those positions without costing you a cent or they're platforms that offer very cheap brokerage. And so it's now much more accessible to put into place a dollar cost average strategy. Some shout outs go to obviously super hero and steak. You both have $0 brokerage on US stocks. This is not sponsored and also super hero who have $0 on ETFs. I think self-worth also have a promo at the moment at the time of recording on zero dollars into eight ETFs again not sponsored. But if you're looking to do small amount investing into broader market products as well, have a look at raise. It takes your spare change and invests it when you hit a particular dollar amount. And then also for crypto, bamboo is a great one. Again, it's a it's a macro investing app, so plenty of platforms out there for you to start putting cash into the market. 

Alec: [00:26:02] I feel like you got to give one more a shout out. Okay, that's built its whole business model around. 

Bryce: [00:26:08] Perla Yeah, yeah. But they do have pretty. They I think they're nine. Ninety five. Oh, really a trade or it's $0 at brokerage ETFs if you hold them for more than a year. 

Alec: [00:26:21] Oh, well, that's pretty good. Yeah, but 

Bryce: [00:26:22] you still have to pay it up front. 

Alec: [00:26:24] I'm pretty sure on an average fund is something like that. Yeah, just that's confusing. 

Bryce: [00:26:27] I could be wrong and apologies to power if we are but from yeah, but they certainly promote the idea of of a long term thinking, yeah, 

Alec: [00:26:37] they yeah, they founded the get rich slow club. They did. Yeah, which I feel like one of our sayings for years has been if you try and get rich slow, you just might do it. And so I'm not saying they've ripped us off, but I'm saying that moderate. Yeah. 

Bryce: [00:26:55] So look, that kind of brings us towards the end of the episode. I think the main thing for me is there is no I have to DCA or I don't have to DCA. As we've both highlighted, we take the approach of taking into our core and then our satellite portfolio. With our individual stocks, we have a bit of a different approach, so don't feel like you need to come up with a strategy for dollar cost averaging, and that's the only way that you can get get into the market. It's just one way that you can start to build wealth over a long period of time.

Alec: [00:27:24] Yeah. Now I did pull some examples from our book the spoke about dollar cost averaging into individual shares. Do we want to talk about them or, 

Bryce: [00:27:33] well, let's give a shout out to the book because there's a pretty comprehensive chat shot they say. Yeah, yes. Available on Amazon at the moment, 42 percent off 19 points ahead across to Amazon or eBook Topia and get Get Started Investing feed 

Alec: [00:27:46] or go to your local bookstore and ask them if they've got it. Yes, and if they don't ask them to order it, 

Bryce: [00:27:51] why don't you give us one example to close out? 

Alec: [00:27:53] There's a few that we pulled out. We looked at Cleanaway, we looked at Coles, we looked at Webjet. Webjet is probably the the best example of the power of dollar cost averaging rather than investing in a lump sum. We wrote the book sort of mid-November 2020 and we looked at the year that was so from the start of 2020 to when we were writing, and the premise was it for the first six months of 2020, your dollar cost averaged in once a month or if you just bought it all at the start of 2020. And if you'd bought Webjet at the start of 2020, you'd be down fifty. Two percent on your investment because of Covid, but if your dollar cost averaging and bought on the first of every month for six months, you'd still be down, but you'd only be down eight percent. Nice because the stock you bought pre-COVID would be down significantly down that 56 percent. But then the stock that you bought at the depths of Covid would actually be up because it fell so much. Then it started to recover. Yeah. And so in that example, dollar cost averaging just smoothed out the incredible highs and lows of the year that was 2020 for travel stocks. That same example held with Kohl's, although Kohl's had a really good year in Covid because of panic buying toilet paper, all that stuff. And then Cleanaway had a pretty flat year, so we had somewhat different types of examples. But similar story with Cleanaway, you know, even though it was relatively flat for the whole year, it was up two and a half percent for the for the whole time. Within that, there were some highs and lows and dollar cost averaging just smoothed it out. 

Bryce: [00:29:29] And I think no better example of the power of decay with the market crash in 2020 from Covid. If you were just putting money in, you would have got the climb up to it, you would have got the bottom. You would have then enjoyed the run all the way up that we're seeing at the moment. So. So if you would like more info, definitely go and check out the book. We cover it in a bit more detail. There's plenty more examples similar to the one Ren just spoke about that talked through, you know, the difference between buying in bulk or DCA. So make sure you buy that or buy it for one of your friends for Christmas. 

Alec: [00:30:01] So final thought to leave it with, you know, we grow up as investors. We hear about buy low, sell high. Yes, let's change that to buy regularly. 

Bryce: [00:30:13] Buy, buy, buy, buy, buy regularly. 

Alec: [00:30:15] Don't sell. 

Bryce: [00:30:16] Yes. Nice. Well, that's a great way to finish it right now. So I'll stick around because next week, as we've mentioned, we're chatting with one of our mates, Flynn, who really takes they buy and don't sell to the next level. 

Alec: [00:30:29] Well, he told us he never sold. Yeah. Well, then there was one caveat, but basically has never sold. Yeah, so he's been investing for a while.

Bryce: [00:30:36] So for more info on that and to hear a pretty, pretty relatable journey, tune in to next week when we chat offline, but otherwise we'll chat next week. 

Alec: [00:30:43] Sounds good.

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