【Feature】Truth of Dollar-Cost Averaging and Leveraged Incremental Investment - 11 (Summary)

Well, up to now we have conducted simulations for various market patterns without leverage, with 2x leverage, and with 3x leverage, using a lump-sum investment approach across 10 sessions.

From the perspective of common sense in the world, the typical adages about a regular investment are

① seize the day and start as soon as possible leveraged investment trusts are dangerous

②

and the like.

However, regarding ①, while it is reasonable to say that with no leverage you should do so, with leverage the maturity tends to be shorter and it becomes a relatively short-term showdown, so the current market conditions and how the market will move in the short term in the future can significantly affect performance.

Also, regarding ②, with leverage it can shorten the time considerably depending on market conditions. Moreover, by averaging in over time, risk can be distributed to some extent, so it cannot be deemed universally dangerous.

However, in the end, systematic investing (especially long-term accumulation) is a method chosen precisely because you cannot know the best timing to invest. In that sense, leveraged funds imply a need to choose the timing of purchase (which directly affects performance), making them a highly speculative, “expert-oriented financial product.”

And even with no leverage, how much you accumulate during downtrends will substantially influence later performance.

In that sense, in rising phases you should avoid buying, and it is better to start buying after historically large declines, such as after famous shocks like the ○○ Shock.